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This will change as South Dakota trusts gain more popularity among the wealthiest in America. Perpetual trusts will ensure generational wealth for centuries as
by synthos 5y ago
This will change as South Dakota trusts gain more popularity among the wealthiest in America. Perpetual trusts will ensure generational wealth for centuries as long as these aren't legally challenged.
Normally trusts have a cap of 100 years or so before all the funds are disbursed and the pampered beneficiaries can fritter away most/all the wealth as per the article.
These trusts are also:
- obfuscated (difficult to 'find' to litigate)
- state tax free
- legally protected (difficult to litigate)
- can designate oneself as beneficiary
America is the new tax haven
- VWWHFSfQ 5y agoThere's nothing new about America being a tax haven. It's always been one of the strong selling points. Some states are better at this than others though.
- cascom 5y agoNot sure how we are defining wealth here, but for 99% of Americans this is a non-issue given the estate tax exemption of $12m/individual $24m/couples. Perpetual trusts are a boon to the super rich, but doesn’t change the math for everyone else.
- pydry 5y agoThese trusts will compete with the middle classes for assets. This kind of thing is a large part of why there is a housing crisis. The existence of this wealth is an existential threat to the middle class.
- cascom 5y agoI don’t have the numbers at my fingertips but I believe it’s institutional money (pensions, endowments, insurance companies, sovereign wealth funds, etc) that are the real drive asset prices, not the marginal high net worth buyer
- synthos 5y agomy point isn't so much taxation on inheritance (although that is unfair too - step up etc...) my point is that these trusts are specifically structure to prevent decendents from exiting their wealth. through poor risk taking, ineptitude, getting sued. nothing will affect the trust
- cascom 5y agoFair point, but Procreation + divorce / kids in multiple marriages will typically exponentially whittle it down (not crazy to think that a trust could go from 3 to 40+ beneficiaries over 60 years) + trust fees / poor management
- cascom 5y agoNot sure how we are defining wealth here, but for 99% of Americans this is a non-issue given the estate tax exemption of $12m/individual $24m/couples. Perpetual trusts are a boon to the super rich, but doesn’t change the math for everyone else. So don't honestly see this moving the needle much