Do you think estate tax won’t affect your inheritance?

Do you think estate tax won't affect your inheritance? You have to read this article!

Here’s a math problem to consider: Having checked the data from 2012 to 2020, and after deducting the abnormal doubling of Trump’s tax reform in 2018, the inheritance tax allowance has increased by an average of 1.62% per year. Assuming a 40-year-old couple in 2020 has a life expectancy of 90 years with no Trump tax reform (the inheritance tax allowance will be transferred back after 2025), the inheritance tax allowance for the couple in

2070 = 5.49 million × 2× (1+1.62%)^53=25.78 million. Assuming that the annualized return on assets is 6.5%, we discount 25.78 million back to 2020, = 2578÷(1+6.5%)^50 = 1.1 million.

1.1 million is just enough for a house in Los Angeles: a two-bedroom house in a nicer area, or a three-bedroom house elsewhere. If you already have 1.1 million net worth at the moment, you may have to pay inheritance tax in the future, and the highest inheritance tax rate is as high as 40% (from 1997 to 2001, even as high as 55%)!

Assuming that in the future the husband and wife’s total assets exceed the tax allowance of 12.5 million, you will need to pay $5 million in inheritance tax! With Survivorship products, 40-year-old couples can leverage 22 times (10 years, 23,000 per year), 45-year-old 16 times, 50-year-old 12 times, 55-year-old 9 times, and a 60-year-old 7 times.

Everything must be done as early as possible. At the age of 40, use $230,000 to solve the problem of 5 million in advance (with 10 years to pay it off). Why not?

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