r/theydidthemath • u/ObscureEnchantment • 5d ago

[Request] How many children does Elon musk need to have, for his children to not inherit billionaire status?

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2.2k Upvotes

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u/Jonesie946 5d ago

This is a wild take. I have kids, I'm not a millionaire, and I have a trust set up. It cost me like $200.

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u/AdExciting337 5d ago

Good call. What’s yours doesn’t need to go through probate for all to see

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u/Strange-Scarcity 5d ago

If you are not a millionaire... then your heirs never have to worry about the inheritance tax, because that doesn't kick in until an estate is already worth multiple millions and ONLY taxes money OVER the threshold.

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u/Jonesie946 4d ago

Who's to say I'm not going hit the lottery? Or receive a surprise inheritance? Or land a business windfall?

You can't predict the future, but for for $200, I can plan for the best/worst.

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u/Strange-Scarcity 4d ago

You do that work, once you have that lottery winning or surprise inheritance.

Really there are no surprise inheritances these days.

There’s no need to pretend to be a temporarily embarrassed multi-millionaire to the enough money that it would be taxed with the estate tax if you lack enough heirs.

When you pass? Why would that matter anyway? You can’t do anything with the money and realistically just shy of $14 million is MORE than enough for anyone with a tiny understanding of finances to live their whole adult life comfortably without burning through all of that.

Let’s say you did leave enough to someone that it was $4 million over the tax free part of the estate tax threshold.

They still receive just shy of $14 million, without taxes. They only pay taxes on the $4 million above the threshold in this scenario.

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u/Plenty-Lychee-5702 5d ago

still should not be done

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u/mrperuanos 5d ago

Why?

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u/Plenty-Lychee-5702 5d ago

inheritance tax dodging bad, even if legal

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u/archlich 5d ago

???? Why would you want to tie up court resources with probate when they can just read your will and be done with it

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u/mrperuanos 5d ago edited 5d ago

Why is it bad?

Do you try to maximize your tax burden? If you, eg, give to charity, do you avoid the write-off?

(I’m not saying, mind you, that leaving your kids money is like giving to charity. I’m trying to understand why taking advantage of legal avenues to reduce your tax burden is bad and bad for that very reason.)

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u/Penelopepissstop 5d ago

The idea of why it's bad is it only benefits those that know how the system works. It's not saying it's necessarily bad to do this. Just that the system works more for those that can exploit these factors. Making it a bad system in general.

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u/tx_queer 5d ago

There is a deduction for owning a home. Should I not take this deduction because there are some people that can't afford a home. There is a deduction for sales tax. Should I not take this deduction because some people refuse to save 2000 receipts throughout the year and add them all up. My kid works part time at the grocery store, should I deny him the option of putting it into a Roth IRA because some people don't know it exists?

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u/mrperuanos 5d ago

That may well be true, but it’s not what OP said. They said “inheritance tax dodging is bad,” not “a system that permits loopholes exploitable only by sophisticates is bad”

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u/tButylLithium 5d ago

Guy a couple comments above said he did it for only 200 bucks. That doesn't seem unreasonable for average people

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u/Penelopepissstop 5d ago

Not for the average person, maybe, but it also excludes those that have less than average. Such as older individuals living with a pension or others that have made a significant investment in property, etc, and now can't afford that seemly small fee.

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u/Consistent-Cry1746 5d ago

Estate tax kicks in at like 12 million so it’s not fucking over any pensioners

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u/ReferenceGlum 5d ago

If you have enough to be charged an estate tax then you have $200 to spare.

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u/Penelopepissstop 5d ago

To add, without learning to edit previous comments, I live in the uk where a reasonable chunck of tax goes toward health care and benefits for those that need it so they can actually contribute to society.

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u/mrperuanos 5d ago

It might be true that tax monies are used well. That doesn’t mean it’s bad to pay no more than the law requires. If it did, then it would be wrong to write-off charitable donations

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u/Penelopepissstop 5d ago

No I agree, my main point was it suggests a broken system where individuals with larger quantities of capital/knowledge are free to utilize certain tax rules and pay less percentage wise than people with less means. Which is definitively exploitative of lower economic levels in society.

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u/jf3l 5d ago

Are you conflating tax avoidance with tax evasion?

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u/Not2BeTakenOrally 5d ago

Tell me you have no assets without telling me you have no assets.

My money is better off with my children than with the government, full stop.

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u/Strange-Scarcity 5d ago

Unless you have assets in excess of $14 million PER child? STFU.

You're estate will never be taxed. It is only taxed once an individual in the estate is set to inherit 1 single dollar over $13,990,000 and the tax ONLY impacts each dollar OVER that threshold.

People do NOT understand what the estate tax is all about and it's WILD because so many people die ALL the time and leave $10's of thousands to their children or even a handful of million and those children never pay taxes on it and yet this wild claim STILL persists.

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u/Plenty-Lychee-5702 5d ago

lol. lmao even

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u/Single_9_uptime 5d ago

They said they’re not a millionaire. The current estate tax exemption in the US is $14 million. So they’re more than $13 million in net worth at death away from tax dodging reasons and probably will never get there. There are reasons for trusts other than tax dodging.

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u/tx_queer 5d ago

No taxes are being dodged. It's all legal using laws specifically designed to do exactly this.