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Yeah, so the thing is that you give the money away while you're alive. You can give 15k per year per spouse. So a married couple with two married children can g
by tathougies 8y ago
Yeah, so the thing is that you give the money away while you're alive. You can give 15k per year per spouse. So a married couple with two married children can give away 30k to each child and 30k to each son/daughter-in-law. That reduces the total estate that is taxed by 60k each year. If you have 20 years left of life, that's 1.2 million dollars given tax free. Way better than a probate.
You're correct that if they gave all 1.2 million in one year, it's subject to tax, but no one does that.
- delecti 8y agoThe threshold for estate tax is over $20m right now for that same married couple. Your example takes 20 years of foresight and only gets you an extra 5% before hitting estate tax.
- tathougies 8y ago20 years of foresight is not much if you start at 55. 5 percent is still free money. I'm not sure what the argument here is. The rich are more organized than you give credit for
- delecti 8y agoMy point is that your initial comment stated this was a good strategy to avoid probate and estate taxes. I agree it's a good strategy to avoid probate, but I disagree that it's a very useful strategy to avoid estate taxes. You also incorrectly (or at least greatly oversimplified) said gifts weren't taxed.