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Estate & Gift Tax

Well, I’m officially back at school. I’m looking forward to a great final semester of Undergrad (man, does that feel weird or what?) and looking forward in anticipation of my summer internship with Grant Thornton, L.L.P. A lot of things are getting close, now: Grad School, first full-time job, first apartment, etc.

But on the topic of this semester: I’ve got a class that I’ve looked forward to for quite a while now. As odd as it may seem, this class is Estate & Gift Tax. (I admit, I’m a bit of an Accounting & Finance nerd…but you already knew that.) So what will this involve? A lot of it, of course, will be the legal side of things. We’ll go over the relevant laws and regulations, and from what I hear we’ll memorize a good chunk of them. In and of itself, that’s not so exciting. What is exciting, though, is what it will lead into: the basics of estate planning.

The professor who teaches the class spoke in my Personal Financial Planning class last semester, and outlined a couple of basic setups for estate planning in the two class sessions he spent with us. I’ve gotta say: wow! There are some very simple tools available that can all but eliminate estate taxes on up to a million dollars. I’m guessing more advanced ones can take you quite a bit further, but there wasn’t really enough time for that. Thus, I’m taking the class now.

Why so excited? Well, here’s why: if you do’t have a proper plan in place you’ll pay up to around a third of your estate in taxes. That means important family property or the family business may have to be sold off just to pay the tax. That just sucks. But maybe that’s not a huge consideration for most people. That’s alright. I’d still recommend finding the most suitable and most effective plan for reducing your estate tax, and for this reason: you already paid income taxes on every bit of that value! In my opinion, that stuff’s been taxed already and the government has no right to take it away simply because you died. I believe you have a right to pass on what you’ve built up to your spouse and/or children, to charities, and to other beneficiaries…in it’s entirety. The government won’t be anything like responsible with it anyway, so placing as much of it as legally possible out of their reach is, to me, the best course.

 

Thanks for reading,

-Taylor

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