by GarySpicuzza » Sat Nov 01, 2008 12:13 pm
I have *ambivalent feelings towards the USA Federal Estate Transfer Tax System.
On one hand, Sock-it-to-'em Obama, is right...spread the wealth...he's a lawyer, so he just figures go get yourself an A-B Trust along with your Irrevocable Life Insurance Trust, buy an expensive Second-to-Die policy from Gary and your family will be A-Okay and the Gubment gets their money.
On the other hand, it's rather disgusting that the event that gave rise to the Gubment claiming and demanding up to 55% of your entire Estate is the fact Mom or Dad simply died.
There is an unlimited marital deduction for all amounts one spouse leaves to the other, as long as the inheriting spouse is a US citizen. So estate taxes aren't an issue when one spouse dies and leaves most of the estate to the other. A problem can arise when the second spouse dies and the estate goes to children or other relatives or friends. If the separate estate for each spouse is below the tax minimum, but the combined estates would be over the minimum, the estate might have to pay extensive taxes when the second spouse dies.
The first spouse can avoid this by establishing a tax by-pass Trust at his/her death to hold property for children or other Beneficiaries at the death of the second spouse. While the second spouse is still alive the Trust assets will be used to provide for the surviving spouse. At the death of the second spouse the Trust assets will be distributed to the named Beneficiaries. Because the second spouse never owned the assets in the Trust, those assets don't become part of the second spouse's estate for purposes of calculating Federal Estate Taxes.
*ambivalent
The coexistence within an individual of positive and negative feelings toward the same person, object, or action, simultaneously drawing him or her in opposite directions.
On one hand, Sock-it-to-'em Obama, is right...spread the wealth...he's a lawyer, so he just figures go get yourself an A-B Trust along with your Irrevocable Life Insurance Trust, buy an expensive Second-to-Die policy from Gary and your family will be A-Okay and the Gubment gets their money.
On the other hand, it's rather disgusting that the event that gave rise to the Gubment claiming and demanding up to 55% of your entire Estate is the fact Mom or Dad simply died.
There is an unlimited marital deduction for all amounts one spouse leaves to the other, as long as the inheriting spouse is a US citizen. So estate taxes aren't an issue when one spouse dies and leaves most of the estate to the other. A problem can arise when the second spouse dies and the estate goes to children or other relatives or friends. If the separate estate for each spouse is below the tax minimum, but the combined estates would be over the minimum, the estate might have to pay extensive taxes when the second spouse dies.
The first spouse can avoid this by establishing a tax by-pass Trust at his/her death to hold property for children or other Beneficiaries at the death of the second spouse. While the second spouse is still alive the Trust assets will be used to provide for the surviving spouse. At the death of the second spouse the Trust assets will be distributed to the named Beneficiaries. Because the second spouse never owned the assets in the Trust, those assets don't become part of the second spouse's estate for purposes of calculating Federal Estate Taxes.
*ambivalent
The coexistence within an individual of positive and negative feelings toward the same person, object, or action, simultaneously drawing him or her in opposite directions.
Posted: Sat Nov 08, 2008 03:18 am Post Subject:
Fireyone, I'm sorry, that post was in jest with only a tad of sarcasm on the side. :lol:
Posted: Sat Nov 08, 2008 01:06 pm Post Subject:
No apology needed. I had actually hoped you didn't think I was talking about anyone here. I should have directed the comment more towards myself. I myself love a little sarcasm.
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