1poorkid can take care of herself. Whatever is left of our estate will just be icing on her cake. I don’t worry about it at all.
Sure she can, as can ours. We told them their inheritance was getting college paid for.
Let me make two things clear:
We are not deciding to spend less on us for our kids to inherit more. If our savings gets fully spent, I sure as heck hope it’s on a good time and not medical care. I don’t give a second thought about leaving money to the kids when I decided to spend or not spend money.
If a little bit of thought and action now makes it that the gov’t gets less and the kids get more, I am all for that, particularly given that doing so also happens to in the very least be a break even for us, if not a decent benefit. Where the benefit to the kids calculation comes in is over the top of ours, as a hedge against our having made a mistake, given we can’t predict the future. But I love financial strategizing. YMMV.
For example, in deciding Roth conversions our calculations told us that there was a benefit to doing as much as we could up through the 24% tax bracket, for our benefit, subject of course to assumptions that may or may not be accurate and subject to annual review. The benefit increases hugely if something happens to one of us and we are then filing in the single tax bracket, not MFJ. And if early on in our retirement we both get taken out on the interstate by a semi, there is further benefit to those conversions, given the kids will inherit and be subject to even more taxes than we are. It’s not a calculation of how much can I leave my kids because I am so worried about them, but a strategy to maximize the return of our hard work in a way that we want, not yet more money given to a gov’t that can not get it’s act together, no matter how much money it pulls from taxpayers.
The whole premise of the OP misrepresented what has actually been discussed on this board.
Just to be clear, I wasn’t picking on you (or anyone else).
I was just answering the OP’s question. I don’t worry about taxes, especially after I will be dead. I could go on about “should”, but that really isn’t relevant here (e.g. the government should eliminate the step-up basis, and tax more heavily inheritances than work). They may do that in the next 20 years, or they may not. It isn’t (to me) worth my attention.
ROTH conversions to benefit us? Sure, that is worth looking at.
You sounded offended, and that wasn’t my intent. I was just answering the OP, not singling anyone out for criticism if they happen to disagree with me.
I do however find the whole “the gov’t can take what it can get” way of thinking hugely lazy, and perhaps that is simply what that person wants to spend his money on so I hope he gets what he wants. But for this thread to represent what we have been talking about at length on this board, changes to consider making in your finances so that you maximize return on your work days and direct that return to where you want it to go, and turn it into why is everyone agonizing over maxing out an inheritance for their (probably undeserving) kids while ignoring their own needs, is really a disservice to this board. I realize it’s in part due to the old telephone game when we were kids, where whispers were sent down a chain of people and confused horribly from the original message at the end, but it was time to set the original message straight, as the distorted messages were no longer funny.
I was just answering the OP’s question. I don’t worry about taxes, especially after I will be dead. I could go on about “should”, but that really isn’t relevant here (e.g. the government should eliminate the step-up basis, and tax more heavily inheritances than work). They may do that in the next 20 years, or they may not. It isn’t (to me) worth my attention.
I lean Conservative and feel that the problem isn’t too little taxation, it’s too much spending. There will never be enough taxation to satisfy the spenders. That being said, I can be somewhat sympathetic to the idea of not creating trust-fund babies and all of the bad stuff that often comes with that. But eliminating the step-up creates nightmare accounting hassles. While I am NOT in favor of lowering the Unified Credit for Gift & Estates, (“raising estate taxes”), I’d rather see THAT and keep the step-up. In my adult lifetime, I knew of a $600,000 exemption during Clinton and vaguely think I remember a smaller exemption in the 1970s (I am age 62). $600,000 under Clinton is probably about double that today. With an estate tax reach “that low”, no one should feel bad about retaining the step-up (other than the Far Left who want it all).
I am NOT advocating for a $1.2M exemption, but just saying that the cleaner way to punish the rich (even upper middle class), if that’s what society wants to do, is to just lower the exemption and don’t complicate people’s lives crazy with an elimination of the step up.
…and turn it into why is everyone agonizing over maxing out an inheritance for their (probably undeserving) kids while ignoring their own needs, is really a disservice to this board.
I can’t recall specifically, but I seem to recall a poster on this board worried about exactly that. Or maybe they were relating a story about a parent. It all blurs together sometimes.
This is a very real problem (IMO…some folks may not consider it a problem). When I’m gone, I will no longer care. Not by choice, but because I will physically not be able to care.
Again, I don’t want to get into the politics of taxes. There are other boards for that. If I’m lazy, so be it. I just do not care about taxes and tax avoidance. My finances are not that complicated, and I have few areas I can exploit for avoidance. Of more concern to me, since I will be retiring before Medicare eligibility, is minimizing my reportable income so I can get a decent ACA plan that I can afford.
Worst case, 1poorkid will owe some taxes when we die. Fine. It will be less than the value of the estate, so she can liquidate whatever she needs to cover it. I’m not gonna stress over it.
I can’t recall specifically, but I seem to recall a poster on this board worried about exactly that,{agonizing over maxing out an inheritance for their (probably undeserving) kids.} Or maybe they were relating a story about a parent. It all blurs together sometimes. Words in brackets mine.
Or you remembered someone claiming that was what they were doing and that was the message that stuck, even though the original message had to do with making sure that you make sure your money goes to where you want it to go to rather than to Uncle Sam.
Like I said, it’s like the game of Telephone. A message gets stated, and someone halfway reads it while watching TV, criticizing something that was never said in the first place, and now all that can be remembered is that change in message. Or a small fragment of the post gets quoted and then people pile on to that fragment that has been replied to out of context of the supporting information. Seemingly no one takes the time to read the whole thread for clarification when things get confusing, understandably not wanting to take the time to do so, but then waste time posting yet another one liner that reinforces the morphed discussion further away from the original post.
You demonstrate this with your I can’t recall specifically, but I seem to recall a poster on this board worried about exactly that. I can recall specifically that was what people implied to several threads I started, even though it has never been something I worry about, nor a concept that I stated. I just want my hard earned money to go where I want it to go, to the extent the law allows, and I will do my best to make sure the gov’t gets as little of it as possible.
I just do not care about taxes and tax avoidance.
Then skip those threads rather than pile on with half read misinterpretations. Let those of us who do care about avoiding taxes discuss it without polluting the thread with distortions of the intent of the thread. TMF has kindly provided a tool for that called “ignore thread.”
Again, I was just answering the OP’s question. “Yes, I have given thought to this”. If you start a thread about tax avoidance, I might skim it, but I’m not likely to comment.
This thread was about investing for heirs (first sentence: “When making investment decisions, so many on this board (and elsewhere) are quite focused on leaving assets to heirs.”). I have given thought to that, and already stated my opinion that it is a mistake. And, yes, part of that is taxes. Which I don’t care about (and stated so multiple times). The governments (there are usually at least two involved: state and federal) will not seize everything, just a percentage. Big deal. I’m gone, and 1poorkid better not be relying on her inheritance for survival. So a non-issue.
I don’t see this as “polluting” this thread. It’s quite on-topic.
Start a thread on adjusting bases, and I probably won’t have anything to say (other than the government shouldn’t allow that). But that’s not what this thread was about, or at least not explicitly.
Again, I was just answering the OP’s question. “Yes, I have given thought to this”. If you start a thread about tax avoidance, I might skim it, but I’m not likely to comment.
Actually no, as usual threads morph and I was replying to your reply to my post on how threads morph. If you have a problem with the quotes I used from your post to reply to, that’s one thing, but you can’t just retreat back to your initial reply to the OP because you can’t defend your reply to me.
You posted this and I replied to it: I can’t recall specifically, but I seem to recall a poster on this board worried about exactly that,{agonizing over maxing out an inheritance for their (probably undeserving) kids.} Or maybe they were relating a story about a parent. It all blurs together sometimes. Words in brackets mine.
That has nothing to do with your replying to the OP’s post. You were replying to me. Look at the thread in whole thread mode if you are confused.
It was a reply to your post in that you seemed to be saying no one has ever posted about how to leave more inheritance. I know I’ve seen posts like that, even if I can’t pull out the post number off the top of my head. I don’t keep notes, nor save posts (well…very rarely…only if there is something I foresee needing to refer back to). Though I do remember one poster recently saying he couldn’t get his mother (or grandmother?) to spend any of his inheritance, which is not uncommon for depression-era people (which I gather she was). This isn’t an overriding theme, but it has come up (and likely will again).
Anyway…still not criticizing anyone. And trying not to get political on this board. You seem to enjoy trying to structure things “just so” (e.g. I just want my hard earned money to go where I want it to go, to the extent the law allows, and I will do my best to make sure the gov’t gets as little of it as possible.), especially regarding taxes, and that’s fine. I don’t enjoy accounting and finding loopholes. And that’s fine too.
I’m good with a trust for my heir (singular). And I’m gonna make an attempt to spend most of it before she can inherit.
I bet P-boxing inparadise would go a long way towards “environmental remediation”
Nah. She doesn’t violate my rules for conduct. She’s not abusive or ad hom. Just because we may disagree about something doesn’t warrant p-boxing, IMHO. I don’t want to create an echo chamber.
