Time To Have The Money Talk: Bad News, There Is None
November 8, 2008 / 11:07 am • By Dr. Melissa ClouthierPre-post caveat: I am not a financial adviser, so this is for what it’s worth.
The New York Times has an unintentionally funny article about talking to family members about their finances:
It’s started coming up in asides I hear from middle-aged friends who are concerned about their parents ending up in the poorhouse. And I see it in e-mail from people in their 60s and 70s, who can’t believe their offspring got mixed up in funny mortgages and wallets full of credit cards.
But often, the grown children don’t know precisely how the devastation in the markets has affected their parents’ portfolio, and the older parents don’t know what their children’s monthly debt payments are.
What the writer fails to mention is the obvious: If Obama follows through with his plans, children who receive an inheritance from their parents will likely be taxed into oblivion. The so-called death tax will be back. Capital gains taxes will increase. So, the smart thing for families would be to transfer the deed, sell the house to the kid, whatever, to avoid the taxes in the future. And it would be smart to do it now. In addition, if an older family member intends to sell the house and move into special housing, doing it now would be a good idea. Only problem? In many parts of the country, you can’t sell a house if you want to.
And then, of course, the elderly have lost their portfolios in the latest stock dive. And their kids are mortgaged to the hilt and losing their job. To help matters, Obama has promised to let the Bush tax cuts go away. So for all Obama’s opining about lowering taxes, they’re going to increase and not just for so-called rich people.
Bottom line: People are stuck. The Baby Boomers, the biggest generation, march ever closer to retirement. They care for their elderly parents who are living longer due to medical advances, and that’s a good thing. But there are financial realities.
Obama will bailout the car companies. He voted for the Wall Street bailout. Who will bailout the taxpayer?
H/T Instapundit
One Response to “Time To Have The Money Talk: Bad News, There Is None”
November 8 2008 / 7:31 pm
Reply
Dr. C:
As a sincere person, you may be taking the NY Times article at face value – serious advice on intergenerational wealth issues in difficult markets.
The NY Times is not in the least interested in the purported issue. The liberal media is merely setting out claims that Obama is “inheriting” a bad economy. That way, he can try to claim credit for the expected and natural turn-around of capitalism. OR…when his redistributionist policies quash recovery, he can plead exigent circumstances.
To recap, with the old media, it’s always abotu credit and blame, never about reality.
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Capitalism is inherently cyclical. The bottom of the capitalist cycle beats the best of the socialist times. Ask yourself: in 1933, would you rather be an unemployed factory worker in America, or a starving peasant in Ukraine?