Episode-872- Mark Matthews on Estate Planning — 25 Comments

  1. Listening to the introduction to the podcast on estate planning, I can not help by think of a line from Fight Club, also the motto of the folks over at Zero Hedge; on a long enough timeline the survival rate for everyone drops to zero.

  2. When I saw today’s topic heading my 1st thought was BORING. But I really need to get this done this done as we’ve reached a point where our assets out weigh our debt and I don’t want my siblings taking advantage of our kids. Question: can an 18 old son be given guardianship of his younger brother?

  3. Thanks Jack, I am going through that situation now with my mother, she is 82. Luckily I have power of attorney and I am the executor. I have a troublesome sibling who may try to create problems. This will avoid 99% of it.

  4. I am so glad, Jack that you did this episode. My boyfriend has been dealing with his mother’s affairs after she had a stroke and is now incapacitated in a nursing home, she did not have any of the provisions in place that you all discussed today. Since I have seen first hand how difficult this situation is for him, I have been researching what I can do so anyone who is left to take care of my affairs will have everything spelled out for them. This definitely falls into the “prepper” category and I believe it is one of the most considerate and necessary things one can do for the loved ones that are in charge. Thanks again Jack!!

  5. Exelent interview, I wish Mr. Mathews practiced in my state. Which kind of relates to my question. If I create an estate plan in one state and later move to another do I need to redo it in the newly residing state?

  6. Very timely for me. I am trying to figure this stuff out for my aging parents. I wish they would be with me WSHTF, but probably one or both will be gone when the financial collapse comes.

  7. Many parts of todays show were useful.
    But, Just hearing other parts of todays show made my blood boil….
    Like the taking of family farms through taxation! (Picture your hard-worked homestead being one of those farms.)

    The nonsense laws being passed on us are tantamount to a game of ” FIZBIN ” – look up the video and watch total BS in action … and picture the American public as the one being delt the cards.
    Here’s a simple scenario;

    Let’s say I were a mafia boss or a ganster of some sort.
    And I came to a city, town, and went door to door and demanded a portion of your hard earned cash and or property-for your “protection”…
    … and promised to charge you high interest for every day you did not pay-
    …or worse, put you out of business or lock you away for years, or destroy you completely.
    Then I took your hard earned money, and bought myself a huge mansion, million dollar cars and toys, lit my cigars with your hard earned cash I stole from you. Then came and demanded more and more cash.
    How long would it take you to WAKE UP and no longer comply, and /or eliminate me?
    …Well the “boss” is the government – and we are the “WILLING” victims.
    What the government is doing is THEFT and EXTORTION! – Hidden within the title of “TAXES.” They distort the US Constitution with their corruption to keep the public confused and jumping through hoops- and call it ” LAW “, by use of fear and punishment!

    Sometimes I feel I am the only one who is TOTALLY and COMPLETELY FED-UP with the lies, corruption and THEFT of not only my future , but my childrens and grandchildrens as well.
    – how do we slay the dragon?

    -Rant over.

  8. Excellent show today. One question regarding precious metals. Not the best strategy, but say a person holds all of their wealth in 1/4 oz. Gold Eagles and they have 100,000 of them. At a face value of $10, they would have $1,000,000. However at spot gold price, currently at about $1,650 per oz., they’d have about $41,250,000. For tax purposes would this U.S. currency be valued at face value or spot gold value?

    • I believe they would be valued at face value and would be seen in the same sense as paper or “monopoly”/fiat money is seen, but thats just my opinion.

    • I believe the IRS would look at market value of coins. I would never cheat the IRS, but sometimes those coins get lost, or perhaps Mom gave you 10,000 worth last year (gift tax limit), and 10,000 the year before. It’s so tough to be sure without the banks paper trail…

  9. Thanks. my brother & I inherited our parents retirement accounts, as they both passed away just at retirement. I used half of mine to buy a home. Since the money was tax deferred, any funds i use are considered income. Fortunately, we didn’t have any federal inheritance tax, but about 6% Pennsylvania inheritance tax applied on total inheritance. Then, the funds I took out ended up with federal & NY state & city tax about a 40% rate [when i divide the total by the total tax]. Unfortunately, i have to take money out of the fun to pay these taxes, which itself is taxed also at about 40%. When i add up all the money i will be taxed and compare to the amount i received, the effective tax rate will be over 50%. [its is about 55% – 40% + 40% of the 40% tax, again, and again…] i.e. I withdrew funds to buy home. I receive bill of about 40% of that amount. I withdraw that amount & pay. next year i am taxed 40% on the 2nd withdrawal, & so on..] I am keeping this from going on after 3 years by having enough withheld on this year’s withdrawal to pay the current tax bill and next year’s tax on this withdrawal, so I will not have to do another withdrawal next year, which would cause another tax the year after again….. BUT, i didn’t do that last year [i had about 20% withheld not full 40%] because that would have really increased how much I needed to withdraw, and all of that would have been in the highest bracket. Turns out I may not have saved much if any. If I also had to pay an inheritance tax to the fed or to NY state on this, i don’t want to think of what the total tax would be! Fed i think is about 20%… I am looking into any way to reduce this at all, so if anyone has any ideas. well, render unto Ceasar….
    keep up the great work!

  10. oh, and what upsets me is I am not rich – all these tax bills are way more than i even earn in a year. And i did it to buy a home- what they want me to do. Now i have real estate taxes on the home [fortunately, we have a 25 year abatement, so we pay about 10% of what we normally would pay. Otherwise I could not afford to live here!
    Well, my wife & i own our home free & clear, and no matter what, its ours. And we love it.

  11. The government’s thievery is unacceptable. I’m afraid I will have to find an alternate means to pass on wealth to descendants/heirs, such that the mickey D’s-grease-stained clutches of fedgov get a fraction of my wealth that I feel comfortable with giving away…and that fraction will be much, much less than 55%.

    Fedgov constituents are too obese and unhealthy as it is, and it would be a terrible thing to do to have 55% of my wealth go into buying fast food and candy and beer for them because the only thing that would accomplish is to worsen the diabetes epidemic.

    • Let me be clearer on just how i got screwed with a 55% rate [plus 6% PA death tax]
      What I inherited was my parents IRA. tax-deferred, so theoretically, it had been growing tax free, and they had been putting in about 30% more each year than if it had been taxed [the 30% would have gone to fed].
      So when i inherited it, it wasn’t enough to require fed death tax. i saw an excellent housing buy opportunity in this down market, and my wife & I love it & will probably spend the rest of our lives here. I paid cash, the entire amount I withdrew from the inherited account is labeled income and i got taxed about 35-40%. That amount I need to pay the tax on that income also had to be withdrawn from this ‘untaxed’ account, so that is also income. So I have had to withdraw about 155% of what I needed for the home, sent the 55% to fed & state, and pay 100% for house. but i have a home i love, 100% equity, and a wife I love, 100% mine too. I am lucky, so i will laugh at the people who say a tax cut to wealthy is ‘giving to the rich’ while a cut in benefits is ‘stealing from the poor.’ A tax cut means you are taking less, not giving, and cuts in benefits means giving less, not taking from…

  12. @TheMidwesterner (can’t get the reply link)

    assets are valued at the time of death and the calculated value serves both as the calculation for amount to be taxed and as the basis for the asset to the person inheriting the asset.

  13. So…I looked up to see how many households in the US are worth at least one million in assets and I came up with about 10 million or about 9-10% of the population. What would government do if all those folks who had a loved one pass away and had to pay 55% inheritance tax over one million told them to go screw? Would they put these 10 million people in our already overcrowded prisons? I’m thinking that the inheritance tax laws are going to be changed soon because we all know that most of the folks running this country are in that top 10%.

    • if all 10 million folks who owed inheritance tax said go screw [I assume the 55% rate mentioned isn’t the current federal inheritance tax rate, but the rate i listed in my post, which is the effective rate i’m getting screwed with which is WITHOUT PAYING ANY FEDERAL INHERITANCE TAX!! That’s just the income tax i paid to receive it! plus the 6% Pennsylvania charged me for their death tax, so about 60% so far…. I would owe at least 70-75% tax on any amount that was taxable for fed death tax.]
      Anyway, the fed would lock up a bunch to make them examples, probably go after family members for the $ also, and scare enough people into paying that those that still refuse are not so many they can’t lock them all up.

  14. @TykeClone (I can see the Reply button behind the avatar, but can’t click on it either)

    I appreciate your response, but looking at it, don’t see if it says that it is calculated at U.S. legal tender face ($10) or gold spot value ($412.50).

    I did learn from your response that assets are valued at the time of death. If the deceased has significant assets in volatile vehicles, am I to understand that the heirs could see significant tax benefits if these vehicles spike between the time of death and the time of liquidation for distribution?

  15. Question for Mark Matthews:

    Is there a book (Amazon or someplace easy to find) that you would recommend we read to help prepare ourselves with information about trusts, wills… general estate planning before going to see an estate attorney? I’m thinking we can do a lot of the investigation prior to going and reduce the amount of time needed with the lawyer?

  16. A very good and interesting article and it really taught me something I had no clue about. Though I have two questions, one, how does this work when the deceased family is in another country/the receiver is in another country(as a citizen of only that country)? I expect the tax’s of the country of the deceased would apply. Further, what if one had duel/multi-citizenship? would that cause one to be taxed on both ends? just one? neither or a special tax for such cases?

    Thanks in Advance.