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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Chris J. Horne who wrote (15077)	7/17/2000 1:40:25 PM
From: Sam	Read Replies (1) \| Respond to of 15132

Chris, Thanks so much for your comments. <<If you read the book "Millionaire Next Door", you have to question the wisdom of leaving large amounts of money to your children. Their research shows that it is a demotivating factor that often leads to unproductive lives. I know a couple people who will inherit a million and more, and they are spending like they have it already. Just anticipation of that inheritance is affecting their spending habits. >> That is part of the reason why the attacks on the estate tax are absurd, especially when coming from people who themselves "conservative". I'm not sure where the different levels are either (I also thought that the first was more like 30%, but I could always be wrong about this). Some kinds of life insurance and annuities can be used to legally avoid estate taxes, at least at the federal level. This whole campaign against the tax is an amazing case study in wishful thinking, on the one hand, and great PR on the other. Sam

To: Chris J. Horne who wrote (15077)	7/18/2000 1:32:29 AM
From: djia101362	Respond to of 15132

Chris- You are correct in your understanding. The gift tax is not paid until you exhaust your unified credit of $192K which is the tax due on $650,000 of taxable gifts. Each person can give $10,000 per year per donee, tax free. i.e. mother and father can give each child $20,000 per year w/ out eating into their unified credit. This is the simplest form of estate planning and should always be taken advantage of by persons that will have taxable estates. The $10,000 can be in any form. i.e. cash, stock, % of home, % of family business, etc. The only problem in giving non-cash assets is the need for an appraisal in many cases. Certain types of assets are allowed discounts which in effect allows you to give more than the $10,000. The $650,000 exemption amount which is currently now $675,000, and will be increasing each year until it reaches $1.2M in the year 2010 if I'm not mistaken, could be the year 2007. Anyhow, by the time the phase-in is complete, a married couple will be able to accumulate $2.4M of weath tax-free. This is assuming Congress does not change the present estate tax laws in effect, which is no guarantee.