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« Generating a Great Net Worth on a Small Income | Main | Struggling on a Six-Figure Income »

February 04, 2008

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Giving away is great, but you're right, there's probably something they wish they would have done (a trip not taken, a nice gift never purchased) that they regretted later in life.

Check me on this because I may not be right. The last time I studied anything on the death tax, I was under the impression that it is figured sans encumbrances. That means you can live in a $500,000 home but owe $400,000, you still get taxed on the 500, not $100,000.

I'm more than willing to be wrong!

I hope your wrong Ron!

That's crazy - How old were they though?

Kevin's dead right, these "died with millions noone knew they had" stories are always quite sad to me. Beyond taxes all I see is a lot of missed opportunity - trips to spend time with friends, contributing to making a family member's life easier, nursing assistance in their later years, whatever. I'm sure a number of the people left the cash would rather have had more time with them.

death taxes = the suck.

It is sad that so much of their hard earned money due to frugal living (which has probably already been taxed) will now be forfeit to the government.

Ron -

You're incorrect (thankfully). You can "deduct" mortgages and other debts when calculating the taxable estate. So in your example, you'd be taxed on the $100k, not the $500k value of the home.

I'm sure the death/estate tax has changed in the last 15 years. When my parents died the taxes were assessed on the value of the entire estate - not the net value.

The only saving grace was that the assessed value of the home was less than the market value. However we still had to pay a substantial tax.

I'm not familiar with the law of Michigan, but the couple should not have to pay any estate taxes at all if their estate were properly set up. From the article, it sounds like all the money was in one individual's name. Meaning 2.9 mil minus estate tax exemption of 2 mil would leave a 900k taxable estate. Producing 400k of tax. Now if they had simply transfer some of the assets to the other spouse's name they could have used 2 exemptions, rather than one. Sounds to me like very poor estate planning. And if they've had a will drafted in recent years if would border of legal malpractice

Wah wah .. the death tax. Cry me a river eh? Beats the heck out of a live tax.

I guarantee Willis & Arlene don't care about the death tax..they're dead!

If Warren Buffet & Bill Gates don't care about the Estate Tax (the proper name for the tax code that applies to money left after the owner dies) then why should anyone else?

I tell my kids, if you want my house after I'm dead, you can purchase it from the church I left it to.

Arlene was my second cousin. I am proud of the way they spent their money. If I had that amount of money, I'd spend it exactly the same way. "Love thy neighbor."

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