The first verb to go was “give.” Estate planners helped by describing formal transfers of family assets as “gifting” rather than “giving.”
Now “bequeath” is endangered. See this blog post on dynastic trusts: "Today’s record levels of economic inequality are infecting our future as the top 0.01% bequest vast wealth to their descendants."
Merrill instead will encourage young advisers to go prospecting on LinkedIn. Brace yourselves, LinkedIn members!
Full disclosure: The other day your obedient blogger actually did receive a cold call, not from a wirehouse but, surprisingly, from Fisher Investments.
Losses from cryptocurrency-related investment scams increased tenfold over the last 12 months, according to the Federal Trade Commission. The Internet accelerates the losses, warns Michelle Singletary in The Washington Post:
[C]ryptocurrency enthusiasts have a great command over social media platforms, enabling them to relentlessly plug the investment, which is pushing up prices. Scammers know that many people suffer from “FOMO,” or the fear of missing out. This is the kryptonite for unsophisticated investors.
Victims tend to be young: Adults 20 to 49 were more than five times more likely than older age groups to report losing money on cryptocurrency investment scams. Because self-directed IRAs are lightly regulated, they’re a popular scam vehicle.
Upscale men’s fashion, The Wall Street Journal points out, has lately veered toward jogging pants and sneakers. As movers and shakers return to their headquarters, could boardrooms begin to look like Zoom gatherings?
Fashion guru Andrew Weitz sees suits making a comeback, although the pants may have elastic waistbands. Others have doubts. Except for court appearances and campaign speeches, men’s suits may soon be a memory.
You know he’s dressed up because he’s not wearing sneakers.
The late David Swensen realized individual investors would gain nothing but trouble if they tried to imitate the strategies he applied to Yale’s endowment. Instead, he said, they should simply go passive and cut costs. “[T]he most sensible approach is to come up with specific asset allocation targets that you can implement with low-cost, passively managed index funds and rebalance regularly. You'll end up beating the overwhelming majority of participants in the financial markets.”
Swensen didn’t think much of paying investment advisers, and he questioned the conventional wisdom that investors must become more conservative as they age. If elderly investors have ample funds, Swensen argued, they shouldn’t be investing for themselves. They should be investing, fairly boldly, for their young and middle-aged heirs.
Kiplingers recently offered a cautious version of the same advice.
David Swenson has died:
https://www.nytimes.com/2021/05/06/business/david-swensen-dead.html
He was younger than I am!
Click here for the collection of posts about Mr. Swenson.
The actual components will be fancier than shown above, but you can bet tax practitioners are hard at work on mechanisms to offset tax on substantial capital gains. Early descriptions of president Biden't tax plans include a top income tax rate of over 40 percent, and that rate also would apply to capital gain realized by taxpayers who are income millionaires. Also vulnerable, nonmillionaires who realize once-in-a-lifetime gains that push their income into seven figures. If stepped-up basis is altered so that gains over $l million are taxed at death, inheritances would be diminished by what amounts to a junior-varsity estate tax.
For estates of the genuinely rich, the Tax Foundation estimates the tax on gains plus the usual federal estate tax would produce a combined tax rate of 61%. The usual reliable sources think such a punishing blow is unlikely to become reality.
Meanwhile, wealth holders seek defensive measures. The Marvelous Multimillionaires Tax Loss Machine should help a lot. A Wharton study estimates the IRS could receive 90% less revenue than expected from the proposed tax increases.
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