10 thoughts on “I’m worried about my grandmother.”

1. I hope congress and the president do something to prevent the estate tax from returning to the punitive levels in place before the Bush tax cuts.

   Best wishes to your grandmother.  She sounds like a great lady.  

   Maybe she should write her congressman as well.

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   1. No Estate tax = Aristocracy

      Just ask Warren Buffet.

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2. .
   
   If I was 75 years old, and extremely wealthy, I’d look in the mirror and ask that ugly mug what I really need anymore.  

   If I was that old and extremely wealthy and had children, well, that couldn’t happen, because before I got that old I’d have distributed most of it to them.  
   
   If it was all in one big asset, like a mine, I’d have forced the one with the most kids of their own to join the business with me, as a partner, and gradually shift control to her/ him.  If the assets could be split, then all my children would share in the blessings.   All the ones that still call me each week, that is.  

   Your Grandma’s estate is only exposed to the estate tax if its large, way more than any one person needs.  The tax may be of no concern to her.  She may think that its best to not coddle her children and make them earn everything they get.  

   Of course, if not one single child, grandchild or great grandchild is willing to give up their life to move near to great-grandma, be her companion and look after her, maybe its best for the government to take it all.  

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   What most people overlook is the voluntary nature of the estate tax.  To qualify for the tax, a person has to cling tightly to their great wealth until they die.  If they instead share their blessings with their children or their church or the local animal shelter, they don’t qualify.  

   One of her progeny needs to tell great-grandma that she can enjoy great blessings if she would loosen her grasp.  She can spread joy and relief and peace.  She can make it so that she is remembered more fondly.  

   MADCO, I ask a favor of you:
   
   go visit her, tell her that she cannot give anything to you, that you won’t accept it, but that she should give away most of her fortune to some one relative who’s had a tough go of it.  

   Dying rich is no great achievement.  Making others happy is.
   
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   2. I mostly agree with what you say.

      Here’s the problem for me personally. When I was younger and single- I was prepared to live near her after grandpa passed.  She pushed me away.  I think she sincerely wanted me to be my own person. And I think she was hoping- against all evidence- that one of her kids would step in and she would follow their lead.

      So then I got married and we have kids and we’ve built a life here.  Nothing about our life here translates to a life there- it would be upheaval all around. And we’d have to do it knowing that Grandma would not be receptive.

      Giving it away would be against her nature- partly out of that coddling the kids and grand kids thing – partly out of fear – and partly just ’cause. And distributing it would be complicated, way more so if she doesn’t move.

      That said- my immediate fear is not that the gov’t gets to collect estate tax.  My immediate fear is that Gm would get it in her mind that at 96 with her husband long dead, all of her contemporary friends gone, and a one year window with zero estate tax (2010) that there is a solution that answers most of the questions.

      We’ll be visiting shortly and I’ll get a better sense. But I would prefer the Congress and President to get together and announce some ez fix – a larger exclusion than we had pre-Bush, and indexed to increase over time, and a new calendar.  

      Of course, my dad his in his 70’s and in average to poor health, so I have my concerns about him too. His wife is younger than I and she gets everything so the inheritance chain to me is …weak.  

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      1. .
         
         you mentioned suicide fears in the original post.  How did I miss that ?

         She went through the 1929 Depression as an impressionable teenager.  She does NOT want to ever be hungry again.  Completely understandable.  

         So, I wrote a pretty good reply, it just isn’t all that applicable to the issues that you raised.  
         
         I think I’ll cut it out and save it in case someone asks the right question sometime in the future.

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         Every big family has at least one loser, doesn’t it ?  Why can’t the Barron X of your family move to Afghanistan (just guessing) and look after her ?  What have they got to lose ?

         Excuse the ignorance, but this is more of a problem for your Dad’s new wife than it is for Grandma, isn’t it ?  Unless her worry is breaking up and selling off pieces of, say, a family farm, which she wants to stay in the family after she’s gone.  Otherwise, I don’t see how the tax law comes into play.  Of course, I’m the guy who didn’t see any harm in the Supreme Court appointing a know-nothing to the Presidency, since we had reached the end of history.
         
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         1. on the Big Hairy emotional issues, it’s ez to miss the personal story.  I said I mostly agreed- where I disagree is that any of that helps in her situation.

            As for the solo volunteer- Gram would resist, of course. My dad’s generation would be nervous unless it was one of them- and so would feed the resistance.  In my generation- there isn’t anyone available. Not really.

            My dad’s wife’s problem is how to keep the value intact and minimize the tax hit- and then the fights and difficulty she’ll endure from her in-laws when the time comes.  She’s a pretty self centered person- not sure it would even occur to her to worry about her mother in-law’s mental health. Nor that she’ll need to make sure my dad merges his eventual inheritance into their joint assets, rather than keep it separate for his kids (some hers- some not). But she’s ready to spend.

            It’s remotely possible that the tax law won’t be an immediate factor. But it’s doubtful possibility.  The reality is- and Gram knows it- keeping the thing together is hard enough now and will only get crazy harder after she’s gone. The estate might have one summer to keep it together. Maybe not.

            Like I said- best would be for the feds to fix the thing and announce it so she won’t even be thinking of it.

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3. Without going back to look up any of the details, here’s what I recall:

   The phase-out of the estate tax was a part of the Bush tax cuts, which went primarily to the wealthiest Americans.

   When it was passed, we were running a surplus (remember that?). However, there was some concern among fiscal conservatives and others that an outright repeal of the estate tax wasn’t prudent. So the estate tax was to be phased out. Furthermore, to get some more votes, the repeal was given a sunset – 10 years. The rationale given was that if conditions changed for the worse, then the estate tax would return. If everything remained hunky-dory, then the estate tax could be repealed permanently.

   Well, now it’s 10 years later and what we’ve got is a widening income disparity between rich and poor, a deep recession with a near-meltdown of our banking system, and ballooning deficits.

   While I empathize with your situation, MADCO, I think we should allow the estate tax to return.  

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   1. There are  better description of what happened – but in a nut shell: Rules in place at the time of the so-called “Bush tax cuts” required certain fiscal measures to be me 10 years out.  They only they could do “eliminate” the estate tax was to phase it out vvverrrry gradually- and then bring it back in year 10- which will be 2011.

      Politically it was also a bonus that it would have to ceom back just in time for the mid–terms, in what I am sure they were hoping would still be an R White House and Congress. Thus forcing any D’s (or fiscally and socially sane candidate) to have to run on “increasing taxes”.

      I have no resistance to bringing it back- in fact I want it to come back.   But the way it is now- it goes away in 2010. Completely.

      And then comes back at pre-Bush levels in 2011.  My CPA neighbor calls it the “throw grandma from the train – but in 2010” provision.

      And while I, nor none of my relatives are wanting to throw grandma from the train- I worry that she might some ideas.

      Bring it back in a sustainable way.  I believe

      Here’s some good sources on why it’s a good idea.

      http://www.cbpp.org/cms/index….

      http://www.nytimes.com/2005/08…

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