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In reply to the discussion: Bernie Sanders to propose dramatic expansion in estate tax on richest Americans [View all]TexasBushwhacker
(20,137 posts)Smart businesspeople take out substantial life insurance policies for the express purpose of paying inheritance taxes. They can also make their children substantial partners in the business before it becomes too valuable so that when they die, the entire business isn't property of the estate.
I'm a bookkeeper and while I don't disagree that a business can be worth $3.5 million and have poor cash flow, it's still the owner's responsibility to think ahead and plan for inheritance taxes if they don't want it to be a burden for their heirs. Of course the entire business can still pass to a spouse without ANY inheritance taxes being assesed and that's as it should be.
When it comes to passing businesses/farms on to children and other heirs, they often get sold simply because all the heirs aren't interested in continuing to own the business/farm. Then the ones that want to keep it have to buy out the ones that don't. That goes for family homes too. That happens even without inheritance taxes. It doesn't have to be viewed as a great tragedy.