If it’s just privacy, you can set up revocable trusts which will avoid probate. Im sure Mr Pearl set up irrevocable trusts for creditor protection and to minimize estate taxes.
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Lawyers and experienced asset researchers at development companies can look up revocable trust assets pretty easily. I know from experience. But, yes, you are correct, those reasons apply, too.
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NYT thinks there is no US outside NE. In fact, I wouldn’t be surprised if the reporters don’t know there are people outside NYC. After Sandy Hook, they sent a reporter who think a screwdriver is a tool to open a paint can, to talk to gun owners. She writes, a gun is not tool a screwdriver is tool to open a paint can when gun owners stated that they consider a gun is a tool. Those guys are likely to use a screwdriver for far more than opening a paint can and many other tools as intended.
Those with ultra-high levels of wealth have always been able to sidestep the estate tax. They hire attorneys skilled in exploiting every crack in the law, they get Congress to enact laws providing those cracks.
For example there’s the “Jackie O Trust” or Charitable Lead Trust (CLT) of which the Walton family is currently said to be the largest user according to Jackie O Trusts: A Win-Win Estate Tax Reduction Strategy —
Other trust ideas for the wealthy to escape the estate tax are found in Eight Types of Trusts for Owners of High-Net-Worth Estates | Kiplinger
Many prominent families from the Gilded Age have been able to retain their wealth thru family offices. Some stories are at How Are the Great-Grandkids of the Richest Gilded Age Americans Faring? - The Atlantic
According to https://rcm.rockco.com/
We are a global family office that has served the Rockefeller family since 1882, and the story of the first family in family wealth is our blueprint
So the estate tax didn’t seem to stop the Rockefellers from funding generations of heirs. Incidentally the Rockefeller family office is not restricted to just the Rockefellers anymore, if you have $100 million or more I’m sure they’d be happy to help you out 
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This is not a contradiction. However rich he is, giving up his own wealth doesn’t achieve much until the system changes overall. While he is still in the system, he has to play in the system. The irrevocable trust is probably to hold annual gifts to his kids especially if underage. The gift has to be given outright or be an irrevocable trust. It can’t be in a revocable trust. If you can revoke a gift, it is not a gift.
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You wish. It’s not that simple. Yes, the Waltons and other ultra rich set up something highly complicated and costly. But most wealthy and ultra wealthy end up paying taxes. Just take a look at how much IRS collects in estate taxes.
Im sure he already used up his lifetime gift exclusion. I doubt he even cares about annual gifts. $17k/year isnt going to make a dent in his estate planning.
Well then, it is to hold lifetime gift. I am not sure giving lifetime gift is a good strategy. You don’t get step up. Not always a good tax saving strategy. It is $17,000 per person or $34,000 per couple. If you have 5 kids kids, you are diverting $170,000 a year. Over the life time, it can be a tidy sum without much work.
It depends on his wealth level. If he is ultra high net worth, his federal estate taxes may be more than what his kids would pay in capital gains so getting those asssets out of the estate could be a better strategy than the benefits of step up basis.
There may also be state death tax considerations.
Every penny in this society is taxed at some point. Just because it was taxed once, shouldn’t make it immune from subsequent taxes. Wage earners pay tax when they earn. They pay tax again (sales tax) when they spend that penny. The person who receives that penny will pay tax on it. Inherited wealth needs to be taxed. Increases in value of property needs to be taxed. If I buy a stock, and over the course of my lifetime, its value increases tremendously, and I don’t sell the stock (a move that would trigger capital gains tax) but instead leave it to my child upon my death, and the child then sells it, they pay not a cent in taxes on that inherited wealth, because they inherit it at the stepped up value.
This is just flat out wrong. I’m one of those who benefited to a small extent from this, when I inherited a bit from my parents, and my children will hopefully benefit to a larger extent from this, someday. But it is NOTHING compared to how the wealthy benefit from this tax exemption, generation after generation. That increase in value is never subject to capital gains tax.
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Lower capital gain tax rates are another way the tax rules favor capital over labor.
There is the argument that some provision is needed to compensate for taxing capital gains due to inflation, but a much better way would be to drop the special rates but index the basis for inflation.
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Inherited wealth for high net worth clients is taxed wih the federal estate tax.
The federal estate tax rates are much higher than capital gains rates. And that exemption will drop substantially after 2025.
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The problem with this political viewpoint is that it misses the point. A taxable event must occur in order for something to be taxed. Taxable events are when assets change hands. Holding assets is not a taxable event, regardless of their on-paper or speculated value.
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It does not favor capital. It favors investment. Where would your house or car come from if investors did not purchase shares of the companies that built them? What about your clothing or food?
You are welcome to purchase shares of ownership in the companies that built these things and sold them to you, assuming that you purchased them from publicly traded companies, in which case you would share in the success of the company that made the products you use and consume in the form of capital gains and dividends, which are taxed at the time of payout. If you held your shares, you would pay this tax every year as those are taxable events. That’s capitalism.
Fractional shares of large US companies are available as stocking stuffers for children today.
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Not all capital gains get favorable tax treatment. Short term capital gains are taxed at ordinary income tax rates.
Also, interest from CD’s, savings accounts and money market are also taxed at ordinary income taxes as are income from annuities and non qualified dividends.
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Definitely. Yet we all pay real property taxes on the “value” of the asset, regardless of how much of it we actually own and how much is borrowed money, so why not pay a similar property tax on other personal assets like stocks? So some argue it is time for this sort of an annual tax.
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Theoretcially you can be taxed on anything you own. TVs, washing machine, dryer, bag of Cheetos.
You also have to distinguish federal tax laws vs state tax laws. Property taxes are assesed at the local level. Just as some states tax on the value of your cars.
Tax laws are arbitrary. There are stealth taxes everywhere, most people are just unaware of them.
Watch. When the TCJA sunsets, politicians from NY, NJ, etc will be cheering when the SALT limitations disappear and yet many of their residents most affected by the SALT wont get their deductions anyway when the AMT exemption phaseout is reduced.
I would much prefer to see 501c3 in the tax code eliminated. Let every organization pay taxes on their profits. That would generate far more tax revenue than randomly taxing every asset class that exists. Of course, that would only make sense if the additional tax revenue went to adequately funding social security and medicare.
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Reminder to stay on topic please.
I don’t have anything intelligent to add, but here are some random reactions and observations:
Wealth transfer also happens at the institutional level. Colleges don’t pay taxes, but the benefits of their generational wealth (endowment) end up applying to only a fraction of the tax base (though perhaps mitigated a bit by research contributions to society as a whole). Churches don’t pay taxes, yet their social services generally don’t reach all people who could benefit from them. I’ve been conditioned to think that handing cash out my car window to panhandlers with heart-wrenching signs is an ineffective way to combat poverty. Yet when I have to tell my kid why I’m not opening my wallet at the stoplight, I find myself spewing some word salad with “systemic solution” and “why we believe in high taxes”. It’s all so very unsatisfying as a human being, and yet it doesn’t stop me from taking advantage of tax “shelters” like 529 and 401K for my own salary. I don’t feel that the greatness of America likes primarily in our adoption of capitalism, but rather in our adoption of democracy. 1776 wasn’t a revolution against Marxism (that didn’t exist, duh). It wouldn’t be un-American to combat inequality with tax reform; I don’t really agree with people who think we’d all just quit working hard and sit on our hands for the rest of our lives if we faced a higher income or estate tax rate.
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