Estate tax increase: Forgotten fiscal cliff issue

[MJ DeMarco]

The estate tax was here. Then it was gone. Now it's back. And it's about to become much bigger next year.

More...

 

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[Kak]

The estate tax is the most effed up tax there is. That is money being taxed for the third time. Once for income, then for investment income, then when you die.

 

[Pete799p]

Another reason why the rich are leaving this country and many of the other countries who are in acting similar policies. I really hope people stop this whole hate the rich soon before it's too late.

 

[Kak]

That is why im leaving for retirement. The whole eat the rich thing just disgusts me.

Im sorry, but when someone hates me because of the car I drive or the suit I wear they are hating me because I am successful amd they are not. They may say things like, do you think you are better than me? I would argue if they act that way I am better than them.

Right now I am an emtrepremeur, not a big shot millionare. I make 55k and am busting my a$$. When I make it, it will be because I bust my a$$. And if someone tries to water that down F*ck THEM. If a country tries to eat me, F*ck that country.

There are plenty of coumtries that will embrace successful and innovative people with open ar,s.

 

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[Pete799p]

I just read an article about the how there is a massive migration of wealthy individuals to less hostile locations. The article talked about how many french Millionaires are moving to Switzerland and the UK before it is too late as the country is trying to pass a 75% tax for people who earn over 1mil a year. Many wealth Russians are also moving to the UK for similar reasons. Singapore has become an meca for eastern Millionaires due to their probusiness pro imigration stances and in fact they have the highest concentration of millionaires per capata in the world. US expatriation is more then double what it was a few years ago and the trend is not stopping.

Here is a fastlane business they interviewed a guy whos business it is to help wealthy individuals relocate abroad and protect their wealth.

The article also raises some major issues with the 1% paying 90+% of the taxes governments are at a serious risk if these people decide to leave.

 

[GlobalWealth]

Many wealth Russians are also moving to the UK for similar reasons.

Actually Russia has a very tax friendly regime. There are corruption issues, but with a 13% flat tax and no capital gains tax, it is one of the better places in the world tax-wise.

The great thing about Singapore is they don't tax foreign source income, so many people, like Eduardo Saverin, move there and earn their money outside the country.

US expatriation for about 30 years up until 2008 was about 250-300 per year. In 2011 it was about 1800. So while that may seem like a small number, keep in mind those 1800 were not $10/h Home Depot employees.

These reasons, and many others are the reason I left the US.

Also one of the reasons this has been my busiest year ever.

 

[GlobalWealth]

2012 is an excellent year to establish your estate planning.

In 2012, the estate tax is 35% of estates over $5m. You can do a one time gift into a trust of $5m tax free.

In 2013 (unless something changes), the estate tax is 55% of estates over $1m. Huge change.

One other huge opportunity is to set up an offshore trust to hold you assets. This provides significant asset protection benefits as well as estate planning benefits.

For example, once the estate is offshore it no longer is part of your heirs taxable estate. There are some complicated planning requirements, but if done properly there are significant advantages.

 

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[CashFlowDepot]

Bobby

The only expatriation numbers which are reported are "covered" expats, not everyone who renounces their citizenship. the real numbers are MUCH bigger.

 

[CashFlowDepot]

Where do you recommend setting up an offshore trust besides Cooks Island?

 

[GlobalWealth]

The only expatriation numbers which are reported are "covered" expats, not everyone who renounces their citizenship. the real numbers are MUCH bigger.

Agreed. There are a lot of people that just go off grid. Good point.

 

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[GlobalWealth]

Where do you recommend setting up an offshore trust besides Cooks Island?

Typically I do Cook Islands or New Zealand.

 

[Sveke]

Guys, c'mon, get real. So easy to beat the estate tax.

There's 3 months left, plenty of time, to take advantage of this years one-time lifetime gift estate exemption limits.

People that have the means can pass $5.12 million dollars ($10.24 million per married couple) to their family trust until December 31st estate tax free.

You can then easily turn that $10 million into $30-$60 million tax free. I've been doing it all year for my clients.

So when you and your spouse die, your beneficiaries get it all from the trust tax free.

I'm staying here in the good old USA with zero estate tax worries.

Sent from my Galaxy Nexus using Tapatalk 2

 

[GlobalWealth]

Guys, c'mon, get real. So easy to beat the estate tax.

the issues are much larger than just estate tax. yes, that is one issue, but only one of many.

once you get out of the US like CashFlowDepot and myself, you really start to see the world in a different way.

 

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[Sveke]

the issues are much larger than just estate tax. yes, that is one issue, but only one of many.

once you get out of the US like CashFlowDepot and myself, you really start to see the world in a different way.

Where are you now?

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[Jake]

Or you can store your wealth in the physical plane (stuff). Gold is good option.

"LAS VEGAS -- Authorities in Carson City recently made an astounding discovery in the home of a local recluse whose body was found in his residence. Walter Samaszko Jr. had left only $200 in his bank account. But hidden throughout the house were other treasures, including gold bars and coins valued at $7 million."

I don't think his family (if he had one) would of stressed over paying taxes on that $200

 

[Sveke]

Or you can store your wealth in the physical plane (stuff). Gold is good option.

"LAS VEGAS -- Authorities in Carson City recently made an astounding discovery in the home of a local recluse whose body was found in his residence. Walter Samaszko Jr. had left only $200 in his bank account. But hidden throughout the house were other treasures, including gold bars and coins valued at $7 million."

I don't think his family (if he had one) would of stressed over paying taxes on that $200

Dude, need to post facts, gold and precious metals are certainly counted toward your taxable estate at CURRENT market value.

With this years law, his family would be on the hook to the IRS for a cool $658,070.

Yeah they'd prob give a F*ck if I had to guess.

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[Jake]

"Hey, IRS, I just found $7million worth of gold in my Uncle's house" - said no person ever

 

[Sveke]

"Hey, IRS, I just found $7million worth of gold in my Uncle's house" - said no person ever

Haha, uuuhhhhh, how do you plan on spending $7,000,000 on gold quietly?

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[GlobalWealth]

"Hey, IRS, I just found $7million worth of gold in my Uncle's house" - said no person ever

Exactly. What rational thinking family would pick up the phone and say, "hey guys, I found $7m in gold. is there some tax I need to pay here?"

bwahahahaha

 

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[GlobalWealth]

Haha, uuuhhhhh, how do you plan on spending $7,000,000 on gold quietly?

Typical consumerism mentality.

Why would you want/need to spend it? Except for the 'lottery mentality' people, most families would just put it in storage and allow the wealth to grow.

In the event you need to access some of those funds, it is easy enough to sell in pieces. I know many places where you can easily and discretely unload $100k+ of coins or bullion.

 

[Sveke]

Typical consumerism mentality.

Why would you want/need to spend it? Except for the 'lottery mentality' people, most families would just put it in storage and allow the wealth to grow.

In the event you need to access some of those funds, it is easy enough to sell in pieces. I know many places where you can easily and discretely unload $100k+ of coins or bullion.

Yeah ok bro. Anything you say. Your fat bald hoarder uncle just checked out and left $7 million in gold and you're just sit there in his basement and polish it?

And your in the financial profession talking about money laundering?

Nice

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[GlobalWealth]

And your in the financial profession talking about money laundering?

I'm not in the financial profession. But I am a realist.

On a smaller scale it is similar to the guy who gets a great deal on a used car for $3k and sells it 2 weeks later for $5k. Do you think that $2k capital gain is going on his tax return?

Unlikely.

Sure, it is smaller scale, but there is no way to track (at least right now) the purchase and sale of physical assets.

Money laundering? LOL. Oh to be naive again....

 

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[GlobalWealth]

Your fat bald hoarder uncle just checked out and left $7 million in gold and you're just sit there in his basement and polish it?

I doubt I would polish it. Gold is not corrosive.

For me personally, I may cash in a few coins at a time for purchasing other income producing assets, but I would not liquidate a large portion to go buy a car or house. I have no need for those things.

For those with consumerism mentality, they would be the ones to liquidate and buy the house, cars, boats and other toys that enslave you to your things.

Maybe that's you. Maybe not. I don't know you, but your comments suggest so.

 

[Sveke]

I doubt I would polish it. Gold is not corrosive.

For me personally, I may cash in a few coins at a time for purchasing other income producing assets, but I would not liquidate a large portion to go buy a car or house. I have no need for those things.

For those with consumerism mentality, they would be the ones to liquidate and buy the house, cars, boats and other toys that enslave you to your things.

Maybe that's you. Maybe not. I don't know you, but your comments suggest so.

You have no need for a car or house? And I'm not talking about 15,000 sqft and a Ferrari. Everyone needs shelter and transportation, period.

Why do you need income producing assets when it sounds like you forage and live off the land? Or does your local Latvian grocer accept small amounts of gold as payment?

The only use for income is to exchange for goods and services, essentially the definition of consumer.

Enslave you to your things? I don't even know how to respond to that insanity.

You might be a one man wolfpack.



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[Sveke]

I will say that I haven't read the book that everyone speaks of, yet. I plan on it and look forward to it.

However, from what I've seen here so far, it appears that a common theme is to buck the traditional ways of making money (slowlane, what you call it) and go the way of the fastlane. That's great! I'm all for it!

BUT...to completely ignore some of the few traditional methods that are available for multi generational wealth preservation is foolish and irresponsible.

Just because you and most all of the "99%" don't know of these methods or anyone that can correctly explain them to you and implement them doesn't mean they are bad and not worth your attention.

If you are successful and don't use what's available to you too pass that wealth, efficiently, to multiple future generations of your family, is that really success in the grand scheme? To me, it's not.

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[Jake]

I will say that I haven't read the book that everyone speaks of, yet. I plan on it and look forward to it.

However, from what I've seen here so far, it appears that a common theme is to buck the traditional ways of making money (slowlane, what you call it) and go the way of the fastlane. That's great! I'm all for it!

BUT...to completely ignore some of the few traditional methods that are available for multi generational wealth preservation is foolish and irresponsible.

Just because you and most all of the "99%" don't know of these methods or anyone that can correctly explain them to you and implement them doesn't mean they are bad and not worth your attention.

If you are successful and don't use what's available to you too pass that wealth, efficiently, to multiple future generations of your family, is that really success in the grand scheme? To me, it's not.

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Please explain. I'm sure many of us would take the time to read what you have to say on the subject.

I'd say the traditional way to pass down multi-generational wealth would be gold, artwork, and land. I don't believe you can classify a recently formed paper product as being a traditional way to pass down wealth. But maybe I'm wrong about what you were going to say.

 

[GlobalWealth]

You have no need for a car or house? And I'm not talking about 15,000 sqft and a Ferrari. Everyone needs shelter and transportation, period.

I live in different countries every couple of years so I don't own a house. Makes no sense financially.

And no, I don't need a car. I've only driven a car once in the past 18 months. I rent a car when it is needed.

Why do you need income producing assets when it sounds like you forage and live off the land? Or does your local Latvian grocer accept small amounts of gold as payment?

I'm an entrepreneur and a unapologetic capitalist. I like making money. I have several streams of income from 'income producing assets'.

Not sure where you got the idea I live off the land. I live in a city. I shop at the local market or supermarket. But as a side note, the local coin shop will exchange gold for cash which the grocer gladly accepts.

The only use for income is to exchange for goods and services, essentially the definition of consumer.

Everyone is a consumer to some extent. You, me, even jesus.

But the consumerism mentality is something completely different. The idea that you NEED a car or a house or all the trappings of exterior wealth are clear expressions of consumerism.

Of course that is a matter of relativity though. If you earn $1m per year, but spend on $500k, you clearly have your financial priorities sorted out. But when you earn $100k and spend $120k, now there's a problem.

Your original comment was that someone would need to cash in their $7m in gold. That concept only comes from someone with consumerism mentality.

Don't worry, you have time to figure things out. I was about 30ish when I realized it.

Enslave you to your things? I don't even know how to respond to that insanity.

Yes, exactly. Either you are blinded by your ego in the desire to be right, or you are still caught in the trap of 'keeping up with the jones'. Either way the reality is that most people become enslaved to their possessions. If you have enough money to even be in that category, I would imagine you are there.

Don't get me wrong here though. "Things" are nice. But the mentality of hoarding them and accumulating for the sake of ownership is the problem. If you can afford the Ferrari, go for it. If you can afford 20 of them, great - but I hope you have the money to afford the full time mechanic that requires or else, you now are owned by your stuff.

Time is the most precious commodity. If your 'stuff' consumes your time and takes away from what really matters, you are the slave.

You might be a one man wolfpack.

Nice reference. Great movie.

 

[GlobalWealth]

Please explain. I'm sure many of us would take the time to read what you have to say on the subject.

I am sure he is speaking about trusts and/or foundations.

This year is an ideal year for those of you in the higher net worth bracket to move assets to an irrevocable trust. I am getting bombarded with clients who want to move assets into an offshore trust at this time of year.

The estate tax rate and threshold change dramatically for 2013 assuming nothing is done about the expiration of the Bush tax cuts. For 2012 you can put about $5m into an irrevocable trust gift tax free ($10m for married couple). Next year the threshold goes to $1m and the tax rate above the threshold goes from 35% to 55% - which combined with the lower threshold makes for a huge tax increase.

Moving your asset holdings into an offshore irrevocable trust has several benefits including estate tax minimization/elimination, asset protection, and future wealth creation.

 

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[Sveke]

I live in different countries every couple of years so I don't own a house. Makes no sense financially.

And no, I don't need a car. I've only driven a car once in the past 18 months. I rent a car when it is needed.


But like I said, you and everyone needs shelter and transportation, rent own whatever, you are paying for it either way.




I'm an entrepreneur and a unapologetic capitalist. I like making money. I have several streams of income from 'income producing assets'.

Not sure where you got the idea I live off the land. I live in a city. I shop at the local market or supermarket. But as a side note, the local coin shop will exchange gold for cash which the grocer gladly accepts.


You need cash period, that was my point. Don't care what you trade for it or how you get it, you need it.




Everyone is a consumer to some extent. You, me, even jesus.

But the consumerism mentality is something completely different. The idea that you NEED a car or a house or all the trappings of exterior wealth are clear expressions of consumerism.

Of course that is a matter of relativity though. If you earn $1m per year, but spend on $500k, you clearly have your financial priorities sorted out. But when you earn $100k and spend $120k, now there's a problem.

Your original comment was that someone would need to cash in their $7m in gold. That concept only comes from someone with consumerism mentality.

Don't worry, you have time to figure things out. I was about 30ish when I realized it.



You do need a house. Car maybe not but transportation of some kind, yes.

Sorry, I may have been grey with my words, I by no means meant cash it all in at once, I meant that you would need to spend it down somehow to survive, not lavishly, just eat, pay regular bills, property taxes, etc. normal life stuff.




Yes, exactly. Either you are blinded by your ego in the desire to be right, or you are still caught in the trap of 'keeping up with the jones'. Either way the reality is that most people become enslaved to their possessions. If you have enough money to even be in that category, I would imagine you are there.

Don't get me wrong here though. "Things" are nice. But the mentality of hoarding them and accumulating for the sake of ownership is the problem. If you can afford the Ferrari, go for it. If you can afford 20 of them, great - but I hope you have the money to afford the full time mechanic that requires or else, you now are owned by your stuff.

Time is the most precious commodity. If your 'stuff' consumes your time and takes away from what really matters, you are the slave.


You misunderstood, your perception of my statements was obviously go cash it in at once, buy a 10,000 sqft house, Ferrari, boat. No. Not was I was saying at all.

Even if you spend it down over years sparingly, people will find out. The tax man will come. He always does. Just pay him and go on with your $6.1 million in peace with a clear conscious.



Nice reference. Great movie.

One of the best!

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[Sveke]

I am sure he is speaking about trusts and/or foundations.

This year is an ideal year for those of you in the higher net worth bracket to move assets to an irrevocable trust. I am getting bombarded with clients who want to move assets into an offshore trust at this time of year.

The estate tax rate and threshold change dramatically for 2013 assuming nothing is done about the expiration of the Bush tax cuts. For 2012 you can put about $5m into an irrevocable trust gift tax free ($10m for married couple). Next year the threshold goes to $1m and the tax rate above the threshold goes from 35% to 55% - which combined with the lower threshold makes for a huge tax increase.

Moving your asset holdings into an offshore irrevocable trust has several benefits including estate tax minimization/elimination, asset protection, and future wealth creation.

Exactly, you just forgot the big part where you take the $10 million in the trust, invest it in tax free income producing assets like muni bonds and use the interest to buy a huge insurance policy in the trust and turn the $10 million into $50 million for free.

No need to be shady in offshore trusts, that's just to beat taxes and take unnecessary criminal risk, the strategy is tax free already.

If you've been bombarded by requests and did what I said above for each of them, you would have created hundreds of millions in tax free wealth for your clients and you'd be retiring.

I know what we make on each case. You would only need 10+ clients to make over a $1 million a year in residual annual income before you got out of bed everyday. You could even define that as the fastlane huh?

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