Maks25
Active member
it would be quite erroneous to think that the rich don't pass on their wealth to their kids. Infact they do but not in a way you would expect.
Reason: Simple. Tax evasion.
If the rich dies and pass on their wealth to their kids, the government would quickly jump in and come in for their own share of the cookie in the form of tax. Depending on the country you're from, state laws and the type of wealth being passed down, taxes could range from inheritance tax, to state estate tax, and then there's capital gain tax if you decide to sell but the property goes up in value. Oversea inheritance tax could also be applied if part of that wealth is coming from from overseas. In some countries, inheritance tax could be well over 30%. Now that's a lot of money to be lost!
So what do the rich do? They set up trust funds and charities that are obliged to take 'care' of their children.There's a lot attached to that word care. It simply means the trust fund would finance the children's whims and caprices. That aside, income from trust funds are taxable but exempted from double taxation. Having said that, they also give some amount of cash yearly to their kids. Over the years, this build up to a sizeable amount.
So don't let all the donations to charities deceive you. Bill Gates daughter is worth about $20 million. How old is she and where has she worked? He's already left some cool cash to her and sent the remaining to their trust fund to shelter it from tax.
Reason: Simple. Tax evasion.
If the rich dies and pass on their wealth to their kids, the government would quickly jump in and come in for their own share of the cookie in the form of tax. Depending on the country you're from, state laws and the type of wealth being passed down, taxes could range from inheritance tax, to state estate tax, and then there's capital gain tax if you decide to sell but the property goes up in value. Oversea inheritance tax could also be applied if part of that wealth is coming from from overseas. In some countries, inheritance tax could be well over 30%. Now that's a lot of money to be lost!
So what do the rich do? They set up trust funds and charities that are obliged to take 'care' of their children.There's a lot attached to that word care. It simply means the trust fund would finance the children's whims and caprices. That aside, income from trust funds are taxable but exempted from double taxation. Having said that, they also give some amount of cash yearly to their kids. Over the years, this build up to a sizeable amount.
So don't let all the donations to charities deceive you. Bill Gates daughter is worth about $20 million. How old is she and where has she worked? He's already left some cool cash to her and sent the remaining to their trust fund to shelter it from tax.
