Inheritance entitlement problems

[mrkajz44]

I very much disagree with an inheritance or wealth tax.

The taxation system is built on a few "pillars", one of them being equality and fairness.

An inheritance tax is not fair (at least in my eyes) as all your income is taxed once when earned. The entire system is designed for that. Taxing it again on death does not seem fair.

A wealth tax is not equal. Certain people would be paying taxes on their wealth alone, while others would remain untaxed on their net worth. That's not equal. I really don't understand the argument of "tax the wealthy" - does everyone think if we raise the tax on high-net worth people, they'll just smile and pay the additional tax? Of course not, and that's mainly why it's not done.

EDIT: Sorry if this is a bit of a de-rail. Didn't realize how off-topic this was

[fundamentals]

I am my father's only child (mother remarried twice after their divorce and has two children with her 2nd husband) and this is an issue I bring up with my father all the time.

He lives VERY frugally (almost dangerously so... to his own well-being) and I have discussed with him how I hope he isn't saving all his money just for me. Whenever I have needed financial help in my life my father has ALWAYS been there for me, and I've paid him back for the most part. I would be happier if his bank account had a big fat 0 (or -) after he died than if I got a huge chunk of money from him. I want him to enjoy his life, not live his life working for me.

He also retired with a full pension from GM at 52 so hopefully he's got lots of life left to live and will start making a dent in that bank account.

[Derek Sutton]

Originally Posted by Erick Estrada

She has her own career, is married and her husband's father is also very wealthy so I really don't understand the worry but they are both very money conscious and I sense this type of trait comes from the type of people that overly fixate on money. There's also some resentment because I'm the only child with children and anyone with kids would know how much grandparents adore grand children so I have been seeing my parents much more than my siblings. I believe she actually believes my kids also give me some angle on inheritance that she doesn't have. Whole thing is kind of sad really.




Yeah I was more blind sided than anything. Funny thing is she would probably be a better executive than me because she works in the legal field. It's just disappointing to see something happen like this and I have fears of what may happen if/when my father does pass.

I believe it is an old tradition that the oldest son is named executar. I've heard stories of kids showing up for their mothers funeral pulling a trailer so they can load their haul. A small windfall can really bring out the worst in some people.

I also have an old freind who's family is at a staleamate over their place in Sylvan Lake which the parents left to them. Two of the three kids want to keep it but can't afford to buy out the third, it is in dire need of reapairs and the basic maintenence is a real pain etc... it would have been much easier to divy up the money then try to share the use and care of a holiday home.

[Derek Sutton]

Originally Posted by GP_Matt

I think we should. Certainly an inheritance tax but I think a wealth tax is a good idea as well. Perhaps linked to the income tax so you pay the greater of a wealth tax or income tax.

I think that this has existed in the USA for a long time and is one of the primary funding resources for Obamacare (a substancial increase to what already existed), it just hasn't took effect yet. There is a ton of misinforamtion on the internet surrounding this though.

[troutman]

Originally Posted by mrkajz44

I very much disagree with an inheritance or wealth tax.

The taxation system is built on a few "pillars", one of them being equality and fairness.

An inheritance tax is not fair (at least in my eyes) as all your income is taxed once when earned. The entire system is designed for that. Taxing it again on death does not seem fair.

A wealth tax is not equal. Certain people would be paying taxes on their wealth alone, while others would remain untaxed on their net worth. That's not equal. I really don't understand the argument of "tax the wealthy" - does everyone think if we raise the tax on high-net worth people, they'll just smile and pay the additional tax? Of course not, and that's mainly why it's not done.

EDIT: Sorry if this is a bit of a de-rail. Didn't realize how off-topic this was

Not a de-rail - this deserves a debate.

The counter-argument to your point (if we are talking about "fairness") is that wealth in market economies becomes more concentrated in the hands of fewer people. The children receive enormous inheritances or trust funds, having done nothing to really "earn" it. They basically won the lottery when they were born.

http://en.wikipedia.org/wiki/Thomas_Piketty

Piketty specializes in economic inequality, taking a historic and statistical approach.[20][21] His work looks at the rate of capital accumulation in relation to economic growth over a two hundred year spread from the nineteenth century to the present. His novel use of tax records enabled him to gather data on the very top economic elite, who had previously been understudied, and to ascertain their rate of accumulation of wealth and how this compared to the rest of society and economy. His most recent book, Capital in the Twenty-First Century, relies on economic data going back 250 years to show that an ever-rising concentration of wealth is not self-correcting. To address this problem, he proposes redistribution through a progressive global tax on wealth.[3][22]

[CorsiHockeyLeague]

Originally Posted by mrkajz44

A wealth tax is not equal. Certain people would be paying taxes on their wealth alone, while others would remain untaxed on their net worth. That's not equal. I really don't understand the argument of "tax the wealthy" - does everyone think if we raise the tax on high-net worth people, they'll just smile and pay the additional tax? Of course not, and that's mainly why it's not done.

I don't understand what this means? We already tax the wealthy significantly more - it's basically the only way a tax system works. The tax system is fundamentally unequal; it taxes different types of income differently (interest, royalties, capital gains, gains from certain capital property vs other capital property...)

If this is your objection you have a long list of things to object to.

Originally Posted by Weitz

Why not just raise taxes all around if you are going to tax someone twice on their money?

An inheritance tax is not fair (at least in my eyes) as all your income is taxed once when earned. The entire system is designed for that. Taxing it again on death does not seem fair.

We already tax people twice on their money when they pay GST, and I wouldn't be averse to a PST in this province either. There are other less obvious examples.

[CorsiHockeyLeague]

Fundamentally I think the tax system should be aimed at what is best for the country as a whole. Fairness is only a goal to the extent that it produces the best overall result. A tax code should be as utilitarian as possible.

I recognize that it's incredibly difficult to figure out what the best result will be, what behaviours to incentivize and what to discourage, and whether a provision will actually have the effect you think it will in terms of discouraging or encouraging behaviour, but difficult to achieve or not, that should be the goal.

Anyway that's a thread de-rail of the highest order for which I apologize.

[calgarygeologist]

A few years ago I read a very interesting article regarding the estates of many wealthy individuals in the USA and how many of the wealthy folks were establishing a movement whereby their estates were going to be left behind, in large part, to charities and other groups instead of being distributed to families.

http://www.theglobeandmail.com/globe...ticle15561416/

http://en.wikipedia.org/wiki/The_Giving_Pledge

[InglewoodFan]

I've told my parents they better die broke. I have no interest in their cash as I have done pretty ok for myself, with some support from them over the years. My sister on the other hand thinks she can keep partying hard into her 40s and doesn't have a pot to piss in. I'm sure she's counting on something.

My wife's family just makes me shake my head, lots of posturing to make sure they get their "share" from her mom. I stay far away.

Not to be cheesy, but the best "inheritance" I got from my late father was the drive to never quit trying to make things better for my family.

[flamesfever]

Originally Posted by troutman

Should we have a wealth tax?

Absolutely not.

1. For most people an inheritance is a blessing.

2. The money has already been taxed.

3. It would encourage ways to avoid the tax, like moving money offshore, etc.

4. The money is much more efficiently used, left in the hands of the people, than it is in the government.

[Harju]

Originally Posted by Forbsey-123

Inheritance tore apart my wifes family....constant fighting and long-standing grudges and they used to be so close. I told my parents to spend all their money on a cabin or something so we can all enjoy it together for as long as possible then leave my sis and I the cabin equally....no money....I don't want to think about profitting off my parents death

Inheriting family cabins/vacation properties are a huge cause of family disputes. You are better off dealing with money.

[Weitz]

Originally Posted by Harju

Inheriting family cabins/vacation properties are a huge cause of family disputes. You are better off dealing with money.

Agreed.

[Ashartus]

Originally Posted by troutman

Not a de-rail - this deserves a debate.

The counter-argument to your point (if we are talking about "fairness") is that wealth in market economies becomes more concentrated in the hands of fewer people. The children receive enormous inheritances or trust funds, having done nothing to really "earn" it. They basically won the lottery when they were born.

Exactly. You'd think the right, or at least the libertarian part, would support a system where everyone has to earn their own way instead of being dependent on handouts, regardless of whether the handouts come from government or ancestors, while the left would support it based on reducing wealth inequality.

Why not reduce taxes on the living, so you can enjoy the benefits of what you earn, and instead tax the dead who don't need the money anymore?

[CorsiHockeyLeague]

Originally Posted by Harju

Inheriting family cabins/vacation properties are a huge cause of family disputes. You are better off dealing with money.

It's interesting... on my mother's side, the entire family asset base is real estate that has been in the family for about a hundred years. Each successive generation has built a house, with the former generation's house being inherited by one of the children, which has worked out well. However, as generations pass, the whole thing has to be effectively divided among more and more people - three siblings in my mom's generation have yielded seven kids including me in this generation (though my uncle moved to Australia with two of them so that's effectively now five). My grandparents, who are extremely intelligent and savvy about money and also dead-set on remaining patriarch and matriarch as long as possible, have essentially decreed their wish that nothing be done with this property - it shall neither be sold, nor mortgaged, nor partitioned, nor developed in any way save to build more houses for people in our immediate family. I am fully on board with these goals, but I'm not hard up and will get by okay whatever happens. Others may create tension - my mom, for example, wants to get a mortgage on a portion of the property to fund whatever she wants to do with her retirement, but my grandparents say absolutely not. My aunt, whose husband makes 7 figures and has been sort of in a cold war with the grandparents (massive political / personal differences), wants her three kids to get a good chunk of all of this for themselves, and they might be in the best position to make sure it stays unencumbered and in the family.

It's all a bit of a mess, and all in all the family isn't any more dysfunctional or hostile than anyone's. Everyone loves each other. But it would definitely be easier to split up a big pile of cash.

[DoubleF]

Ouch to some of your guys' stories. Hope you guys can resolve these things.

My brother, me and my significant other are going to work hard to earn more to add money to our parent's retirement, not take from it. We want to ensure they live somewhat luxuriously and not just average as thanks for bringing us up.

Sorry, we're weird like that.

[Locke]

Originally Posted by DoubleF

Ouch to some of your guys' stories. Hope you guys can resolve these things.

My brother, me and my significant other are going to work hard to earn more to add money to our parent's retirement, not take from it. We want to ensure they live somewhat luxuriously and not just average as thanks for bringing us up.

Sorry, we're weird like that.

That is weird.

[Hack&Lube]

My grandfather's brother was significantly older than his siblings when the inheritance was passed on. The older brother had the will changed to give his children basically everything to the neglect of his 10 other siblings (which includes my grandpa).

Consequently I've been in the scenario where I am visiting distant relatives who live in sea-side multi-million dollar homes and who own sizeable real-estate around the world based off of that "old money" while my side has family members living in bungalows in Calgary.

It sucks to think about but it's just spilled milk in the end and learning to let go of the entitlement is the first step to carving our your own wealth and prosperity.

[calgarygeologist]

Originally Posted by CorsiHockeyLeague

It's interesting... on my mother's side, the entire family asset base is real estate that has been in the family for about a hundred years. Each successive generation has built a house, with the former generation's house being inherited by one of the children, which has worked out well. However, as generations pass, the whole thing has to be effectively divided among more and more people - three siblings in my mom's generation have yielded seven kids including me in this generation (though my uncle moved to Australia with two of them so that's effectively now five). My grandparents, who are extremely intelligent and savvy about money and also dead-set on remaining patriarch and matriarch as long as possible, have essentially decreed their wish that nothing be done with this property - it shall neither be sold, nor mortgaged, nor partitioned, nor developed in any way save to build more houses for people in our immediate family. I am fully on board with these goals, but I'm not hard up and will get by okay whatever happens. Others may create tension - my mom, for example, wants to get a mortgage on a portion of the property to fund whatever she wants to do with her retirement, but my grandparents say absolutely not. My aunt, whose husband makes 7 figures and has been sort of in a cold war with the grandparents (massive political / personal differences), wants her three kids to get a good chunk of all of this for themselves, and they might be in the best position to make sure it stays unencumbered and in the family.

It's all a bit of a mess, and all in all the family isn't any more dysfunctional or hostile than anyone's. Everyone loves each other. But it would definitely be easier to split up a big pile of cash.

I would hate to be in this type of inheritance/real estate situation because unless an actual plan can be devised for proper upkeep and maintenance the assets are likely to suffer over time.

My dad's family was and potentially is in a similar situation. My dad had 7 siblings and over time each went separate ways. My dad and his one brother moved to Canada. Other siblings moved to different cities in their homeland. The parents passed away and owned an aging house and farm land. I don't think any of the children actually concerned themselves with the property. I visited the property once with my dad when we went back on vacation one year. My brother visited the property about 2 or 3 years ago. It essentially has gone to ruin over the years. My dad and number of his siblings have passed away over recent years and my brother and I don't even know who the property even belongs to anymore. At some point I'd imagine that the Government will just have to reclaim the land for future use.

[Coach]

Originally Posted by flamesfever

Absolutely not.

1. For most people an inheritance is a blessing.

2. The money has already been taxed.

3. It would encourage ways to avoid the tax, like moving money offshore, etc.

4. The money is much more efficiently used, left in the hands of the people, than it is in the government.

Well this is just straight up not true.

Getting an inheritance that can be lived off of tends to see those people do just that. The MOST they contribute is just by being a consumer, generally of useless things like boats and cars. At least going to the government it can be put into anything from education to road building.

Working in the finance industry, I loathe these people. They are leeches. Most people I know who have been given substantial inheritance either blow within a few years or horde it in their bank/investment accounts earning money for nothing and do dick all otherwise.

[Jason14h]

Working in the finance industry, I loathe these people. They are leeches. Most people I know who have been given substantial inheritance either blow within a few years or horde it in their bank/investment accounts earning money for nothing and do dick all otherwise.

Spending the money puts it back into someones hands, and it is taxed as income for someone!!

The government will never spend money efficiently!! NEVER