Be nice to people. This changes the whole environment.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 10
A lot of effort by many on this board to accumulate ….but then there is the distribution…
“Actually you can give them up to $15,000,000 (lifetime gift limit) right now tax free (twice that if from both you and your wife) and file an IRS Form 709. I think, but don't know, that the gift can be in the form of a transfer of Berkshire shares to them.“
————————-
…plug this into your favorite AI machine….
The phrase "shirtsleeves to shirtsleeves in three generations"
Gemini comes back with a good synopsis & a rule Id’e not heard of…
“The 70/90 Rule: Modern wealth management studies (like those by the Williams Group) consistently show that roughly 70% of wealthy families lose their fortune by the second generation, and a staggering 90% lose it by the third.”
ciao
No. of Recommendations: 12
"“The 70/90 Rule: Modern wealth management studies (like those by the Williams Group) consistently show that roughly 70% of wealthy families lose their fortune by the second generation, and a staggering 90% lose it by the third.”
That's why I have educated my 12 year old grandson about personal finance. He has his own portfolio and we often compare notes. I hope he kicks my ass.
No. of Recommendations: 6
mentoring my nephew since a few years...its now rippling out in a small way , to his siblings from him.....pebble in a pond
No. of Recommendations: 17
consistently show that roughly 70% of wealthy families lose their fortune by the second generation, and a staggering 90% lose it by the third.
You could look on the bright side
This isn't what one wants for one's own family, but it's a good trend for the world: nobody wants to live in a society of fixed dynastic wealth, where you have (or do not have) lots of assets through the luck of what your great-great-great...grandfather did (or didn't do).
The UK had a lot of this, and worked hard to squeeze it out of the system by having high (lately 40%, down from ~80%) inheritance tax for the last 80 years, which has worked to a reasonable degree. The US has gone the other way, with rules to allow creating of new dynasties that seem likely to continue for the next century. (that's about the top few--US income quintile mobility is low, but contrary to popular belief hasn't really changed in a long time)
Of course, it's a genetic imperative to provide as much as you can for one's children. I can see that, so I favour zero inheritance tax on passing wealth to your kids. But I also favour a very large tax on your estate based on however much you inherited during your own lifetime, so generationally it's a "one and done". If you want your kids to be rich, fair enough, but make the money yourself.
Jim
No. of Recommendations: 5
I can see that, so I favour zero inheritance tax on passing wealth to your kids. But I also favour a very large tax on your estate based on however much you inherited during your own lifetime, so generationally it's a "one and done".
WADR Jim…I hope you unintentionally overlooked something. Given the fact that many who are fortunate enough to have good genes and who may not have surviving heirs late in life, by adopting such a harsh proposal as yours that would radically dilute large scale gifts to charity. I for one am glad that there’s at least a 15 million exemption for those who have surviving family members, but exceeding that cap will also allow mean that the rest of us can donate unlimited sums to charity without ever incurring an estate tax. If I’m lucky enough to reach my dad’s age of 95, my Berkshire shares will be quite a substantial windfall at that time for my current list of charities. I’d rather the money go there than to wasteful gov’t spending, and the current tax laws agree with me, so that’s why there is no US estate tax on unlimited legacy gifts to charity.
No. of Recommendations: 3
My mistake Jim..my apologies. I misread your post. I understand now what you’re talking about…an estate tax on the beneficiaries of a large inheritance, not on the estate of the grantor, donor, or testator.
No. of Recommendations: 4
I understand now what you’re talking about…an estate tax on the beneficiaries of a large inheritance, not on the estate of the grantor, donor, or testator.
Yes, but in the sense that it would be a tax on the recipient of a bequest when the recipient dies (i.e., their estate), not when the original benefactor died.
To achieve its goal of somewhat damping the tendency to perpetual dynastic wealth (a nobility class without any need for nobility, if you like), then basically all bequests to individuals would be taxed other than those from parent to child beyond what the parent had inherited. Parent to grandchild would be taxed, unless perhaps the intervening children have predeceased them, because skipping generations would be an obvious way to double the lifespan of the fortune.
In the UK, a study concluded that descendants of people with Norman surnames (like Percy, Glanville, Darcy, Mandeville, Baskerville) still do far better than average in income and education, and live 3 years longer than average, almost 1000 years after the events that gave them the original boost. The only reason this isn't true in the US is presumably that there wasn't much in the way of concentrated wealth in 11th century New York. From a study by a guy in California, give him time.
Jim
No. of Recommendations: 4
Thank you Jim for the uplifting information on my likelihood of an extra three (3) years! I have a Norman surname likely from a foot soldier in William the Conqueror's 1066 A.D. invasion of England.
King Harold Godwinson had to first fend off the Norwegians (King Harald Hardrada and his cousin Tostig Godwinson who had joined the Norwegians) at the Battle of Stamford Bridge on September 25, 1066 then hustle to the south to eventually meet William's Norman forces on October 14, 1066 at the Battle of Hastings 260 miles/420 kilometers, a big logistical challenge for England's foot soldiers. It was a lot to ask of tired English forces. On the other hand, we must give credit to William for the logistics involved with bringing horses, men and supplies across the water from Normandy.
The Battle of Hastings changed history with the Normans centralizing power as opposed to the previously distributed power of England's Anglo-Saxon landowners. William rewarded his soldiers with properties taken away from the Anglo-Saxons. Ultimately this centralization led to a rebellion of sorts culminating in the Magna Carta signed in 1215. As we all know, this was the beginning of a property rights methodology followed for better or worse wherever the English colonized. The Spanish/Portuguese colonies were established with property systems more closely aligned with feudal aspects (a few folks own the property and the rest of the folks live/work on the property). Asian areas were not colonized or only partially colonized by European powers and today some have a hybrid property rights system with periodic warlord induced resets. It can be interesting how long ago cultural aspects still have overtones here in 2026.
Uwharrie
No. of Recommendations: 1
In the UK, a study concluded that descendants of people with Norman surnames (like Percy, Glanville, Darcy, Mandeville, Baskerville) still do far better than average in income and education, and live 3 years longer than average, almost 1000 years after the events that gave them the original boost.
I'm reminded of a similar study by Italian economists. Florence conducted a detailed census in 1427 for tax purposes. The economists traced the descendants of the 1427 cohort (surnames in Italy are extremely localized) and found the descendants of the 90th percentile were significantly higher income and more likely to work in prestigious professions like doctors, bankers, lawyers, etc. than descendants of ordinary Florentines. This is remarkable because the wealth effect not only persisted over a very long timeframe, it was durable through many periods of economic and political upheaval.
Gemini tells me that similar studies have been conducted in the US, Spain, China, Sweden, with similar findings.
No. of Recommendations: 1
Asian areas were not colonized or only partially colonized by European powers and today some have a hybrid property rights system with periodic warlord induced resets.
If the Norman takeover of England was not a "warlord induced reset", I'd love to hear the marketing department spin on it.
No. of Recommendations: 9
In the UK, a study concluded that descendants of people with Norman surnames (like Percy, Glanville, Darcy, Mandeville, Baskerville) still do far better than average in income and education, and live 3 years longer than average, almost 1000 years after the events that gave them the original boost.
This conversation may cause some cognitive dissonance for people who "know " that people who are oppressed should be fully functional and unidentifiable in society after one or two generations of the oppression being removed.
Aussi
