Inheritance entitlement problems

[heep223]

Originally Posted by troutman

“To build a better world we need to replace the patchwork of lucky breaks and arbitrary advantages today that determine success--the fortunate birth dates and the happy accidents of history--with a society that provides opportunities for all.”
― Malcolm Gladwell, Outliers: The Story of Success

Yeah good luck with that. The entire world is a series of random events and lucky/unlucky breaks. It's what you make of it that makes you who you are.

What about globally? We as Canadians, when compared to other regions or countries, are born into extraordinary fortunate circumstances whether you are lower, middle or upper class. Should we reset to 0 because we are luckier than those born as a refugee from a war-torn country? We certainly have a lucky leg-up on them. Or does his little idealistic utopia only exist within western countries?

IMO, in the larger context of history, we are living in one of the most equal and happiest meritocracies that has ever existed. Maybe we should feel grateful for it. I've read Gladwell's books. Meh. Lots of people wave their arms and proclaim that they have the answer. They just never describe what it is.

[bizaro86]

Originally Posted by mrkajz44

I've said it before, but I always take the "my family would never argue over my parent's estate, I hope they spend every dime on themselves" comments with a grain of salt. No one truly knows how a dispute involving money will actually affect them until it happens to them. Basically a "talk is cheap" type approach.

Indeed. There's also some self selection bias here. I'm sure there are some people who are totally planning on contesting their parents estate, but they're not likely to come on here and post that, because it sort of makes them look bad.

Also, I suspect there will be multiple estate battles in my families future. My maternal grandparents death in particular will be a battle royale (one of their children farms the family farm, a different one lives on a second property they own, there's complicated shares of a house, etc). That family will fight over that money.

Personally, I've decided to deal with it by not getting involved, and if I get a cheque at the end great. If not, I loved my grandparents and I make enough money for my own family to live on. It takes at least two people to fight, you can opt out, it just might cost you some money.

[troutman]

Can someone delete the big picture? Making the thread hard to read . . .

[troutman]

Originally Posted by heep223

Yeah good luck with that. The entire world is a series of random events and lucky/unlucky breaks. It's what you make of it that makes you who you are.

What about globally? We as Canadians, when compared to other regions or countries, are born into extraordinary fortunate circumstances whether you are lower, middle or upper class. Should we reset to 0 because we are luckier than those born as a refugee from a war-torn country? We certainly have a lucky leg-up on them. Or does his little idealistic utopia only exist within western countries?

IMO, in the larger context of history, we are living in one of the most equal and happiest meritocracies that has ever existed. Maybe we should feel grateful for it. I've read Gladwell's books. Meh. Lots of people wave their arms and proclaim that they have the answer. They just never describe what it is.

Piketty proposes a global wealth tax. He realizes it is a utopian pipe dream. How do you get every country to sign up for it? It is an answer in theory only.

http://www.bloomberg.com/bw/articles...e-a-crazy-idea

Most of the coverage of Piketty’s book has focused on his diagnosis, but the most interesting part is the cure. He proposes a global tax on capital—by which he means real assets such as land, natural resources, houses, office buildings, factories, machines, software, and patents, as well as pieces of paper, such as stocks and bonds, that represent a financial interest in those assets. In his terminology, capital is essentially the same as wealth. So taxing capital is taking a chunk of rich people’s money. His tax would start small but rise to as high as 5 percent to 10 percent annually for fortunes in the billions. The proceeds in Piketty’s view should not fund an expansion of government: “The state’s great leap forward has already taken place: there will be no second leap—not like the first one, in any event,” he writes.

It doesn’t take a Ph.D. to see that Piketty’s tax is a far stretch—or in his words, “utopian.” Today most countries tax the income produced by wealth—dividends, rents, capital gains—but they don’t go after the wealth itself. Doing so smacks of confiscation, which was widely practiced in the French Revolution but not the American one. Even if Congress did pass a wealth tax, the IRS would have trouble collecting because the wealthy might transfer title to their assets abroad. Piketty recognizes that, which is why he insists that the tax be global. But getting every tax haven on earth to tax equally and to share data is highly unlikely.

Piketty isn’t willing to concede that his wealth tax is dead on arrival. In an e-mail exchange, he said, “First there’s a lot countries can do on their own. It would be very easy in the U.S. to turn the property tax into a progressive tax on net worth. In effect, we would be reducing the property tax on people with little net wealth (because of large debt) and raising it on people with high financial wealth.” He added: “I understand that many people don’t want this to happen, just like many people did not want the progressive income tax to happen around 1900-1910; but it did happen.” As for capital flight, he said tax havens could be punished. “If the U.S. (a quarter of world GDP) and the EU (another quarter of world GDP) want this to happen, then this can happen. Again, this is political, not technical.”

[heep223]

Originally Posted by troutman

Piketty proposes a global wealth tax. He realizes it is a utopian pipe dream. How do you get every country to sign up for it? It is an answer in theory only.

Fair enough, I was responding to your Gladwell quotes.

[troutman]

Originally Posted by heep223

Fair enough, I was responding to your Gladwell quotes.

Sure. I have not read Gladwell so far. Just looking for an opinion challenging the notion that opportunities are equal.

[V]

I don't think I'll have much of anything to leave my kids when I'm gone. We have a nice pension that I pay heaps of money into, and that doesn't leave me with much additional room for other investments. So when we kick the bucket the pension dies with us. I guess we'll have a paid off house, but not much more than that.

[Phanuthier]

Originally Posted by bizaro86

Indeed. There's also some self selection bias here. I'm sure there are some people who are totally planning on contesting their parents estate, but they're not likely to come on here and post that, because it sort of makes them look bad..

(sorry long post)

Not that this thread isn't narcissistic enough as it is, but I'll share a little about a viewpoint from the other side. When my grandparents passed away, they left some inheritance for me, which I used to help pay for a portion of the down payment for my house.

Well, the area I live in has seen massive rent increases up 50-100% within 3 years) due to huge boom in the tech industry, and I was catching this about 1 year into the massive boom, seeing all cash offers for buying property due to the IPO babies of Zynga, FB, Twitter, etc. Seeing this, I feared the rent increase (which it did, as I said above, 50-100% within 3 years) and I wanted to buy a house and fix my monthly expense. How do I choose what to buy? I wanted to buy a property that, in a worst case scenario, I would be ok with for the term of the liability (30 years) - so good school district. Prices for those, in a ultra-competitive academic area, is 2x the price of the house across the street that is in a poor school district. I had only been working 3 years at this time, and had not saved enough at the time; my now-wife was a post-doc here, and makes less than a wal-mart worker. Pricing for housing (including my own) has similarly increased 40-60% within 3 years. So I would not have been able to purchase this house, without the benefit of following in the footsteps of giants set out for me.

How this also helped... 2 months after I purchased the house, my mother was diagnosed with cancer. Since I had built in a pretty good emergency fund, and rent had increased within the 3 months since I purchased the house, it afforded me the ability to make return trips home, to help my family but also to spend time with a my mother which might have a termination date coming up soon. Again, maybe some people might think I should have struggled and suffered more to be able to afford this, but again... huge opportunity for me to follow in the footsteps of giants.

Next... 1 year later, I wished to propose and the following year, get married. About 10 years ago, I noticed some photography by Neeper (outing myself here?) shooting Andrew Ference training in Canmore, started following his work, and I wanted him to shoot my wedding - and from the money I was able to save up from a fixed monthly mortgage (i.e. hedge against huge rent inflation) I was able to afford a wedding without having to go into debt, fly Neeper out to my neck of the woods, and I couldn't be happier for the work he did... again, all thanks to the footsteps laid out for me by the giants of previous generations.

Finally... as I said above, my now-wife was making less than a Wal-Mart worker while in grad school and post-doc, and since we weren't totally pressed for cash (though it was a monthly stress) it afforded her to build a strong CV, and get a job she absolutely loves, wakes up with a smile in the morning and comes back home with a huge smile on her face. She would have never been able to afford this career path otherwise, as she comes from poverty (by US government definition, not like Africa poverty, so below 17,500$ for a single family mother). Again, thanks to the footsteps laid out by by my grandparents.

Entitled? Spoiled? Maybe some might think so, but I'm really glad my grandparents did this, similarly my parents will set up inheritance for my children (probably not really for me), and I will also set the the leave inheritance for 2 generations after me... just seems like the logical thing to do.

/ long winded post

[Weitz]

Originally Posted by Phanuthier

(sorry long post)

Not that this thread isn't narcissistic enough as it is, but I'll share a little about a viewpoint from the other side. When my grandparents passed away, they left some inheritance for me, which I used to help pay for a portion of the down payment for my house.

Well, the area I live in has seen massive rent increases up 50-100% within 3 years) due to huge boom in the tech industry, and I was catching this about 1 year into the massive boom, seeing all cash offers for buying property due to the IPO babies of Zynga, FB, Twitter, etc. Seeing this, I feared the rent increase (which it did, as I said above, 50-100% within 3 years) and I wanted to buy a house and fix my monthly expense. How do I choose what to buy? I wanted to buy a property that, in a worst case scenario, I would be ok with for the term of the liability (30 years) - so good school district. Prices for those, in a ultra-competitive academic area, is 2x the price of the house across the street that is in a poor school district. I had only been working 3 years at this time, and had not saved enough at the time; my now-wife was a post-doc here, and makes less than a wal-mart worker. Pricing for housing (including my own) has similarly increased 40-60% within 3 years. So I would not have been able to purchase this house, without the benefit of following in the footsteps of giants set out for me.

How this also helped... 2 months after I purchased the house, my mother was diagnosed with cancer. Since I had built in a pretty good emergency fund, and rent had increased within the 3 months since I purchased the house, it afforded me the ability to make return trips home, to help my family but also to spend time with a my mother which might have a termination date coming up soon. Again, maybe some people might think I should have struggled and suffered more to be able to afford this, but again... huge opportunity for me to follow in the footsteps of giants.

Next... 1 year later, I wished to propose and the following year, get married. About 10 years ago, I noticed some photography by Neeper (outing myself here?) shooting Andrew Ference training in Canmore, started following his work, and I wanted him to shoot my wedding - and from the money I was able to save up from a fixed monthly mortgage (i.e. hedge against huge rent inflation) I was able to afford a wedding without having to go into debt, fly Neeper out to my neck of the woods, and I couldn't be happier for the work he did... again, all thanks to the footsteps laid out for me by the giants of previous generations.

Finally... as I said above, my now-wife was making less than a Wal-Mart worker while in grad school and post-doc, and since we weren't totally pressed for cash (though it was a monthly stress) it afforded her to build a strong CV, and get a job she absolutely loves, wakes up with a smile in the morning and comes back home with a huge smile on her face. She would have never been able to afford this career path otherwise, as she comes from poverty (by US government definition, not like Africa poverty, so below 17,500$ for a single family mother). Again, thanks to the footsteps laid out by by my grandparents.

Entitled? Spoiled? Maybe some might think so, but I'm really glad my grandparents did this, similarly my parents will set up inheritance for my children (probably not really for me), and I will also set the the leave inheritance for 2 generations after me... just seems like the logical thing to do.

/ long winded post

But won't someone please think of the people who weren't lucky enough to be you!!

But your description there is pretty much bang on to my viewpoint. My parents are fairly well off but I am pretty confidant if I didn't work to establish myself as a professional I wouldn't see much if any of an inheritance. As it stands I likely will and will probably pass it along to my kids.

[GP_Matt]

I don't think anyone is referring to your situation. If the cut off for no tax is 5 million dollars then that is plenty enough to give your descendants a leg up without providing them with the ability to never work.

[T-Rich]

I watched The Descendants yesterday on Netflix and it had a good quote, something akin to "I want to give my kids enough money to do something but not enough money so that they can do nothing"

[flamesfever]

Thanks for that Phanuthier. I'm sure your grandparents would be happy and proud to know you made good use of your inheritance.

As far as leaving an inheritance to grandchildren, it is sometimes prudent to stage the amounts e.g. 50% at age 25 and the remainder at 30. I've heard of horror stories where kids, that receive large amounts of money too young in life, end up blowing it on expensive luxuries that depreciate rapidly with time. Obviously this doesn't apply to you.