His financial plan is to draw SS , Pension , 401k , and pay the CC companies the minimum every month . I'm guessing that his vehicle is paid for . When it's all said and done , the kids will inherit something , just not nearly what it could be .
He says he has no mortgage , so I assume the house will be sold and his debts paid from the proceeds . He really doesn't have a whole lot of debt , He just doesn't care if he dies with a CC balance .
Also , I'm assuming he has a 401k because we have talked about it before . No idea of the value . If the kids are the beneficiaries then that money is safe .
Hmm, sort of interesting. When I asked if the house was paid for, I was wondering if his approach was to stick it to the CC companies by having minimal assets to collect against. Sounds more like his approach is I'm not going to worry about "balancing the checkbook" every month for spending to equal money coming in/available and it will be tomorrow's problem (get settled at death with whatever the assets are worth). Granted debt could end up being larger than assets at that point but your two posts above, that sounds like less of the intent.His financial plan is to draw SS , Pension , 401k , and pay the CC companies the minimum every month . I'm guessing that his vehicle is paid for . When it's all said and done , the kids will inherit something , just not nearly what it could be .
You mean in excess of 15k per person per year ?Giving away liquid assets has tax ramifications. Don't ask me how I know.
I’m busy writing out a living trust for me and mine. No probate, no lawyers, “Own nothing yet control everything.” - John D. RockefellerSounds OK to me - his decision to make. The debtors will get first crack at any assets he has. If he has none, then its up to them if they lend him money or not.
Yes. If you get caught, there can be penaltiies above the tax liability. I have been warned.You mean in excess of 15k per person per year ?
Chris hasn't replied but I seem to remember he lives in / inherited his mom's house. Wouldn't he have to satisfy any debts against the estate?Please explain how children are required by law to pay off a parent's debt.
You can give more than 15k/yr/person, but anything in excess will come off your lifetime gifting allowance. For 2022 the lifetime gifting allowance is $12.06 million for an individual and $23.4 million for a married couple. Let's say you give your kid $1 million in 2022. You must file IRS form 709 IRS stating you gave $985k in excess of your $15k exemption. When you die, the $985k comes off your $12.06 million lifetime gifting allowance. let's say you are single and when you die, your estate is worth $20 million. You will only be able to pass on $11.075 ($12.06-$985k) million tax free to your heirs, not $12.06. So your heirs pay taxes on $20 million - $11.075 million=$8.925 million taxable inheritance. The tax man will get his due.You mean in excess of 15k per person per year ?
Sounds crazy to me to carry balances on credit cards, he is giving 25% of after tax income on that debit to the banks instead of spending it on himself.Sitting around a backyard fire the other night , drinking a Beer and talking about things . The conversation turned to finances , debt , inheritance , etc. My friend said that at his age ( 65 ) , he didn't care if he carried any debt when he died . Why pay off a Credit Card , just pay the monthly minimum . He said " As long as I can live comfortably and have a positive cash flow every month , why does it matter if I'm debt free or not " ? He has a couple of kids but they are doing fine themselves . He's not a rich man so we're not talking about a lot of assets anyway . Long story , short he's not concerned about his kids inheriting anything and he doesn't care if the creditors get stuck with his debt . I know he sounds selfish but that's the way he feels and there was nothing I could say that would change the way he looked at things .
*LOL* The banks are making a fortune off him, last laugh is on him @ over 25% interest and that is after tax income. Guy might live a long time paying that and once a loss occurs to the bank, its a "write off"which means less tax dollars to Washington that everyone makes up. On top of that, whatever debt there is, is sold off to collection agencies, banks don't go after consumer debt like CC cards, not worth it.Since 95%of USA will never reach that lifetime threshold op's buddy has the right idea. Gift his house and whatever other assets he's got to his kids and screw the banks
**** attitude.Sitting around a backyard fire the other night , drinking a Beer and talking about things . The conversation turned to finances , debt , inheritance , etc. My friend said that at his age ( 65 ) , he didn't care if he carried any debt when he died . Why pay off a Credit Card , just pay the monthly minimum . He said " As long as I can live comfortably and have a positive cash flow every month , why does it matter if I'm debt free or not " ? He has a couple of kids but they are doing fine themselves . He's not a rich man so we're not talking about a lot of assets anyway . Long story , short he's not concerned about his kids inheriting anything and he doesn't care if the creditors get stuck with his debt . I know he sounds selfish but that's the way he feels and there was nothing I could say that would change the way he looked at things .
You can give more than 15k/yr/person, but anything in excess will come off your lifetime gifting allowance. For 2022 the lifetime gifting allowance is $12.06 million for an individual and $23.4 million for a married couple. Let's say you give your kid $1 million in 2022. You must file IRS form 709 IRS stating you gave $985k in excess of your $15k exemption. When you die, the $985k comes off your $12.06 million lifetime gifting allowance. let's say you are single and when you die, your estate is worth $20 million. You will only be able to pass on $11.075 ($12.06-$985k) million tax free to your heirs, not $12.06. So your heirs pay taxes on $20 million - $11.075 million=$8.925 million taxable inheritance. The tax man will get his due.
If you don't report the large gift on form 709 and you get caught, there will be trouble.
Maybe cause they caused financial disasters like 2008 need bailouts just so they give themselves bigger bonuses?*LOL* The banks are making a fortune off him, last laugh is on him @ over 25% interest and that is after tax income. Guy might live a long time paying that and once a loss occurs to the bank, its a "write off"which means less tax dollars to Washington that everyone makes up. On top of that, whatever debt there is, is sold off to collection agencies, banks don't go after consumer debt like CC cards, not worth it.
Not sure why some people have something against the people or banks whom they ask to borrow money from. Kind of like backwards thinking.
A friend (or bank) lends you money and you hate them for it and look to cheat them. It kind of reflect what I posted above, not being responsible and seems more pervasive than ever, sadly the youth will pay with higher and higher interest rates over time, when they ask to borrow money because the bank passes on the cost. Banks are smarter than most think.
That’s a gross oversimplification - and conveniently ignores the role lawmakers played by repealing Glass-Steagall (a 1933 reform following bank excess earlier in that decade) in 1999.Maybe cause they caused financial disasters like 2008 need bailouts just so they give themselves bigger bonuses?
Exactly.What’s ironic - The “friend” is actually giving the banks more money than he would by paying the card off.
He is OK with giving the banks thousands of dollars every year in unnecessary interest.
Look, if we assume that his cards are at 18%, then after 5 years, he’s paid back every borrowed dollar, and now he’s just a cash cow for the bank. He’s paying them 18% on the balance. The banks are free and clear, raking in 18%.
If he lives more than five years, he’s paid those “evil” banks more than he would have had he just paid them off.
He‘s not “screwing the bank” - he’s playing their game and losing, badly.
Banks love credit card holders like him.
He’s a sucker and a cash cow, giving the bank far more money than he should.