Is your estate less than $10.9 million dollars? Then you will not be taxed on what you pass to your heirs.
“It’s official—for 2016, the estate and gift tax exemption is $5.45 million per individual, up from $5.43 million in 2015. That means an individual can leave $5.45 million to heirs and pay no federal estate or gift tax. A married couple will be able to shield $10.9 million from federal estate and gift taxes. The annual gift exclusion remains the same at $14,000.”
I think it’s fair to infer that Pizzagirl isn’t paying professionals for tax-related estate planning unless she expects her family to derive a benefit from it. Illinois, by the way, has its own estate tax, with a lower exemption than the federal exemption, and perhaps less convenient “portability” rules when the first spouse of a pair dies. That would significantly lower the threshold at which some meaningful estate planning would be beneficial.
I fully understand why people don’t like the idea of estate taxes, but, well, come on. Millions of dollars exempt is a lot of money. Estate taxation is truly a “first world problem” (a/k/a WPP). And if you want to stick your name on a university after you die, the government won’t tax you on that.
Remember that Harvard got a few million from the Bin Laden family? I don’t think they gave it back but said that it came from members of the family not tied to terrorism. (The fact that it came from the Saudis, a misogynistic, gay-hating country apparently caused them no unease).
a couple corrections to some recent posts:
Yale IS keeping the name of Calhoun College.
@dstark wrote: “My daughter bought a house last year. The original deed, the house was built in the 1950’s, said you can’t sell to people of color. The house is a few miles from SF.”
Doubtful. Possibly the house was built in the 30s. Supreme Court struck down these racial covenants in 1948.
There certainly are problems faced by blacks in modern American society that should be fixed. But building names, a stained-glass window depicting a slave, calling a headmaster “Master,” and 80-year old unenforceable deed wording are not the REAL problems IMO.
We could denounce the unsavory founding and wealth accumulation of the old private universities and not send our children to there. Or we could just change name of the intuition and happily send applications knowing that enough progress and justice have been made.
*To understand the depth of the racism of these regulations, you have to read the descriptions of the grades that FHA gave to neighborhoods from A (green) to D (red). I’ve included them all at the end of this post, but here is the “C” classification (emphasis added), which is where my Oakland neighborhood fell (keep in mind restrictions as used here, means clauses, written into the title, not to sell to non-whites). *
^^This article is about CA and I’m interpreting it to mean this language was written into contracts even after it was illegal to do so.
*The second policy, which was probably even more effective in segregating metropolitan areas, was the Federal Housing Administration, which financed mass production builders of subdivisions starting in the '30s and then going on to the '40s and '50s in which those mass production builders, places like Levittown [New York] for example, and Nassau County in New York and in every metropolitan area in the country, the Federal Housing Administration gave builders like Levitt concessionary loans through banks because they guaranteed loans at lower interest rates for banks that the developers could use to build these subdivisions on the condition that no homes in those subdivisions be sold to African-Americans. *
…
*ROTHSTEIN: Well, let me give you an example of how these policies persist into the present and their effects persist into the present. I mentioned Levittown before as one of these developments. And they were all over the country. They were in St. Louis. They were in Baltimore. They were in San Francisco. Well, at that time - the early 1950s, late 1940s - when Levittown and the Daly City development and others around the country were built, they sold for about, oh, seven, eight, $9,000. In today’s terms, that would be about $125,000 or about two times or two-and-a-half times the national median income. Returning war veterans were able to afford homes like that. Black and white could have afforded them, but only whites were permitted to buy them. Well, today, homes in places like Levittown or Daly City or the suburbs in places like St. Louis and Baltimore and other cities around the country that were built in this fashion sell for 400, $500,000, about seven times national median income. Well, in the intervening period, in the 50 years following the construction of these homes and their purchase by working-class, lower-middle-class white families, those white families gained appreciation - equity appreciation - of about 350, $400,000. They used that money to send their children to college, to send their grandchildren to college. If they sold their homes, they gained that bonus and bequeathed it to their children and grandchildren. African-Americans, who were denied the opportunity to purchase those homes at a time when they could have afforded it just as easily as white families could, they gained none of that appreciation. The result is that today, African-American average incomes, family incomes, are about 60 percent of white family incomes. But African-American wealth is about 5 percent of white family wealth. And that difference between 60 percent of income and 5 percent of wealth is entirely attributable to federal housing policy. Now, in 1968, we passed the fair housing law, the Civil Rights Act, in which we said, OK, African-Americans, you now have the right to buy into places like Levittown or Daly City or any of the places in between; we can no longer prohibit you from doing so. But that’s an empty right because those homes are no longer affordable to working-class and lower-middle-class families. The white families who bought into them when they were working-class and lower-middle-class moved up the economic ladder as a result of their opportunity to live in places like that. And black families were prohibited from doing so. So simply giving people now the right to live anywhere they please is an empty right because the economics have changed so much in the last 50 years. *
http://wesa.fm/post/historian-says-dont-sanitize-how-our-government-created-ghettos#stream/0
This quote is from Dstark’s link.
@pickpocket, from a prior link…
It was not until 1956 that a new housing development in the US was intended or expected to be racially integrated.
http://sunnyhillsneighborhood.org/history.html
And that was probably uncommon for some time afterward.
I was unaware of any of this until reading Ta-Nehisi Coate’s recent Atlantic articles.
adding: I always could see how the right to own property where I grew up had impacted the potential to build family wealth over the generations. I thought this had been one of those “Southern problems”. Turns out it was a nationwide problem.
I am pretty sure for at least a part of my childhood only property owners were allowed to vote in at least some elections. I remember my mother explaining to me why this made sense. It didn’t make sense to me and I must have been around five or six at the time.
I am pretty sure I’m correct about this.
So some weren’t allowed to own property and then, for that reason, were prohibited from voting. Even though I’m old, this isn’t really ancient history we are talking about here. It’s possible that was just a Southern problem.
I thought that all stopped in 1828.
(Unless we’re both correct and you’re 193 years old.)
thank you @dstark . Interesting info and I learned a bit.
Seriously, enough of the victimhood mentality!
When I was young, my family of six lived in a 2-bedroom apartment. My parents had one room, my widowed grandmother the other, and we three kids slept in sleeping bags in the living room. When we bought groceries, we would review every item on the receipt to verify we weren’t being overcharged.
My parents eventually became wealthy (from bottom quintile to top in one generation). But we children grew in modest surroundings and learned the value of money on our own. I became financially independent at age 18, and attended the state flagship on a merit scholarship. And from this springboard, I have also done well.
Doing well in the United States does not require accumulated wealth, high performing high schools, or expensive test prep. More than anything else, it requires a home with loving parents that emphasize education and hard work, and an understanding that there is incredible opportunity for those willing to search for it.
Poll Tax, 1966 — see: Harper v. Virginia Board of Elections, 383 U.S. 663 (1966), prohibiting imposition of poll tax or property requirements in all U.S. elections.
There is a lot of history I never learned in school. I’m trying to catch up because I think it is instructive to understand the past. Also because I’m Southern I believe that Falkner quote : The past is never dead, it’s not even past.
Note that this is quite rare. Your parents were unusual; most stay in the same quintile or move one quintile away from their parents’ quintile.
https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/2016-economic-commentaries/ec-201606-income-inequality-and-mobility.aspx
I immigrated to the US in 1990 with $100 and 2 suitcases of clothes. I will never inherit anything.
Meanwhile my neighbor who lives in the house behind mine inherited her house from her mother. Does she owe me reparations? Following this logic she does, especially because her parrot has bitten my 5 yo daughter.
especially because her parrot has bitten my 5 yo daughter.
[/QUOTE]
Bad, bad pecker. 
@CCDD14 Immigrating to the US is different than living your whole life in a country where there were/ are policies in place to ensure and create systemic inequality. From lead paint infested housing in the Ghetto to failing schools to a lack of jobs to voting restrictions to school to prison pipelines and yes blatant racism…
I don’t think anyone is arguing that restrictive covenants were a good thing.
This isn’t the Middle Ages, where land was the biggest capital asset and principal source of wealth. Besides, people shouldn’t kid themselves. Every week we see statistics on U.S. household net worth and how many people are in debt with almost no net financial assets. Most people, white or otherwise, don’t receive much of a financial inheritance.
Unless your last name is Rockefeller or Gates, passing on a house or some savings isn’t how you’re going to help your kids. If your family is blessed with good health, then by far the biggest inheritance you can give your children is a set of good cultural values and norms (especially a good work ethic and sense of responsibility for their families and their future), a good education, and the fact that they live in a rich and relatively free country.
The author is talking about gold, but what he writes applies more broadly and is a great insight into the nature of wealth. We’ve all read the articles that document how lottery winners and professional athletes who receive millions of dollars often end up bankrupt.
It’s inarguable that many of the problems that people suffer from today are due to the horrible legacies of slavery and discrimination (past and present) that still reverberate throughout our society. It seems stupid not to acknowledge this truth and not to want to help our fellow Americans.
However, the worst economic impact of slavery and discrimination isn’t that African-Americans aren’t inheriting nice houses. With apologies to Mr Coates, that diagnosis is just economically ignorant. It’s that they were denied education, training in skilled trades and professions, and a whole host of other opportunities. This made it extremely hard for young people to see any payoff from productively developing their own talents or to have many positive role models and mentors whose paths they could follow. It’s very hard for an individual to do well if their surroundings lack positive cultural norms for them to emulate.
Unfortunately, many of the ill-conceived attempts to remedy this horrible legacy have created equally bad problems, at least in my opinion. The breakdown of the American family - particularly among African-Americans and poor whites - may be the hardest problem we face.