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It’s actually much easier for you to “shelter gains” in this way: You don’t have to worry about estate taxation. Anyone can borrow against assets (securities a
by twoodfin 2y ago
It’s actually much easier for you to “shelter gains” in this way: You don’t have to worry about estate taxation.
Anyone can borrow against assets (securities and otherwise) they own. Home equity loans are big business, and securities-backed loans aren’t obscure below $300M.
Frankly, it’s the “but the ultra-rich get special low-interest loans” bit that’s the most unbelievable part of the write up. But it’s also the keystone: Without these magic loans, it’s just standard estate planning (which is all about tradeoffs of taxes vs. control) + a likely suboptimal investment strategy.
- Terr_ 2y ago> It’s actually much easier for you to “shelter gains” in this way: You don’t have to worry about estate taxation. *shakes fist* "Damn you, Lucky Ducky!" https://www.gocomics.com/tomthedancingbug/2016/10/28 https://www.gocomics.com/tomthedancingbug/2016/10/28
- chii 2y ago> “but the ultra-rich get special low-interest loans” If you are rich, and is not borrowing at high LVR, it means the lender has a reasonable belief that you can pay back the loan (and the collateral is also good). The lender _can_ give you a lower interest rate, due to the loan market being pretty competitive, because they take on less default risk compared to a non-rich person taking the same loan. it's not gonna be a massive difference, but for large sums, probably does make a difference worth doing.