I hope that everyone’s National Estate Planning Awareness Month is going well. As the nation’s successful make their way down to Florida for “the season”, a cautionary tale from the Wall Street Journal: “Was His Home Connecticut or Florida? The Difference Is a $13 Million Tax Bill”.
A rich douche spent 5.5 months in Connecticut during his last year on this planet and that generate a huge amount of litigation over whether CT can harvest estate tax (reducing the kids’ inheritance). He could have avoided all of the drama for his executor simply by making his northern home anywhere away from the states of color in the Tax Foundation map below.
The Islamic Republic of Michigan, for example, or Live Free and Die Free in New Hampshire. Even California would have been a far better choice since elites there refuse to live their own principles by imposing an estate tax to reduce income inequality and the “generational wealth” that they decry.
A bit part of the mess seems to be that, like Marjorie Merriweather Post, the builder of Mar-a-Lago, this douche had three regular residences: FL, AZ, and CT. So he wasn’t anchored in Florida for 183 days per year.
It is all increasingly complicated when people can work anywhere and have multiple homes. The fights between states and the wealthy are playing out in an increasing number of residency audits, said Timothy Noonan, a lawyer who leads a tax residency practice at Hodgson Russ in New York City.
The trial court judge homed in on one factor: Anderson typically spent 5½ months a year from May to mid-October in Greenwich, and 3½ months from November through mid-February in Florida. He spent three months from mid-February through early May in Arizona.
The judge concluded that “ultimately, the most persuasive evidence demonstrating Anderson’s domicile is where he chose to spend his most valuable and limited resource: his time.”
The trial court concluded that Anderson’s personal, social and property connections with Connecticut and Florida were generally equal, but that the estate failed to prove by clear and convincing evidence that Connecticut wasn’t his true home.
Here’s the Vero Beach place:
Estate tax is particularly hazardous. My late mother’s college friend was a passionate Democrat who avoided paying any tax to the Democrats of Maskachusetts by spending 183 days per year in her Palm Beach place. I hope that she lives forever, but what if in the last year of her life she falls ill while on a January visit to MA and then ends up staying through December in MA for continuity of medical care? MA wouldn’t have a slam-dunk case to collect estate tax, but they could certainly argue that the deceased had given up FL residence and it was time to collect 16% ahead of the kids, the ACLU, Planned Parenthood, and other beneficiaries.
Here’s an Ohio-based law firm’s web page on National Estate Planning Awareness Month showing a typical high-net-worth Ohio family (and no other client photos):
Google AI: “The median household income for Black or African American households in Ohio is approximately $42,433 to $45,800 per year, according to recent state demographic snapshots and census data. This is lower than the overall state median household income, which sits above $71,000”,
Grok: “Law firm marketing frequently uses multi-racial or Black family stock images for inclusivity branding, aspirational messaging, or to signal that services are open to everyone. It is not an attempt to accurately depict the statistical modal client. This is common across many professional-service websites and does not change the underlying demographics of who actually pays for attorney-drafted plans. In short: the image is marketing aesthetics. The typical paying customer for this service in Ohio remains a higher-wealth, usually White household.”
ChatGPT characterizes the image as “generic stock-photo family”, implying that it was chosen at random. Pressed, the AI admits that the law firm’s likely clients are rich white people. How does the image help market to those douches? “It could help if the firm thinks affluent white clients care about signals beyond “this family looks like me.” Marketing often tries to communicate things such as “modern,” “inclusive,” “welcoming,” or “serves the whole community.” Some wealthy white prospective clients may respond positively to that branding.”
Also from the Wall Street Journal, a couple in Manhattan whose kids’ inheritance will be reduced if they don’t move…
“Kids?” you might ask if you remember anything from your high school biology class.
Martin, 60, and his husband, Andrew Farach-Colton, 63, were living in that tiny Upper West Side apartment in 1999 when they found out they would be the fathers of twins. They wanted more space, but knew they couldn’t get it in Manhattan on their salaries.
This blog is turning into a pity party for the ultra wealthy. My cousins aren’t going to get jack squat. My 90 year old aunt, solidly middle class, fell and broke her hip. The gubment immediately swept in and wanted to grab all her assets then throw her in a home. This guy managed to extract $100M + the money he wasted while alive from a fricking hospital network. I hope they investigated ways of seizing the money and giving it back to heal sick people, with the zeal they applied to my aunt. By the way, is the Conn State really free of conflict of interest in deciding this anyway. Isn’t it an interstate matter?
(The black gentleman is obviously on a budget, he had to buy a tiny, half-sized hat.)
OAG: the original post doesn’t ask the financially unsuccessful to pity the financially successful. It is advice for the successful on how to make sure that their children get at least 60% of their savings (the federal 40% estate tax can’t be avoided by moving states) rather than, e.g., only 44%. For those financially successful people who want Ilhan Omar and AOC to spend their savings, of course, the advice isn’t useful.
Please call my aunt “unsuccessful” to her face, I’d love to see that. She raised three kids by herself as a registered nurse, after her ex-husband ran off with a skank, was excommunicated from the Lutheran church for the favor, and has several great grand children. All of her kids are productive, including my female cousin who does wiring for airliners.
As for the “successful”, boo hoo — I’m rubbing the tears from my unsuccessful little eyes. Success isn’t about money, or at least it shouldn’t be. Yeah, the money is better off held by this person’s heirs. Jesus, haven’t you ever read Agatha Christie? Heirs are like rats circling the bits of brie cheese crumbling off stores from Ritchie Rich’s yacht while it is being provisioned.
Give the money to AOC? Pfff. (I assume you mean Areola Oscara Cortes — wasn’t Cortes an invading imigrant? — and not abundance of caution.) Trusting either the weasle or the fox to guard the hen house is wack. Back to the black and white, false dichotomy we see every day on this blog. Put the money into $10K bank bundles, then slip them to people like my cousin to feed her mom real food instead of nursing home slop. We need Robin Hood, clearly. Has DeSantis thought about going to one of these states to run it?
(I’m just joking by the way…or am I?)
UL: Of course, you’re right that financial is just one dimension of success. I edited my comment to reflect that. (Arabs who call themselves “Palestinian” are a good example of this. Except for a few top leaders, they don’t have a lot of money. Compared to the Taiwanese, “Palestinians” don’t invent or produce anything useful. On the other hand, they have the world’s highest population growth rate, which makes them hugely “successful” biologically.)
Given that the government has, via open borders, turned the U.S. into a difficult place in which to enjoy a comfortable lifestyle, I think every financially successful person should try to leave his/her/zir/their children at least the price of a decent house in a walkable neighborhood with good schools. This was easy to afford for those who graduated college in 1982, as I did. Today, it is something only those with elite jobs (specialist physician, Wall Street hero) or family money can buy. In short, the U.S. has become more like Europe and China.
(And maybe the truly rich do need to leave their kids with a lot more. The kids have always been accustomed to having five family houses, shuttling among them in a Gulfstream, and socializing with other super elites. It’s unrealistic to expect them to earn their way into super elite financial status and maybe it is cruel for them to have to fly commercial (economy!) and eat at Panera. So if a rich person has been spending $10 million/year on a family lifestyle then each child needs to inherit $100-200 million.)
Phil, such a special post! You mention that Palestinians “don’t invent or produce anything useful,” but I think you may have missed some of the wonderful things they have contributed to Humanity:
1) They produced a Genocide in Gaza.
2) They produce millions of Child Rape Slaves and celebrate the Cherished and Peaceful Islamic Tradition of Child Rape globally.
3) They Cherish Women generally, and make sure they are dressed in the best head-to-toe black rags known to mankind.
4) They love to murder Jews and Americans generally.
And so much more goodness.
I’m sure your comment was an oversight! Allahu Akbar!
@Abdul El-Sayed, You left out one important contribution: building tunnels and passing that skill on to their children.
Prediction: things are going to get interesting in the years ahead as “fringe” or controversial ideas become commonplace. The alt-right pioneered it but it will become mainstream.
One of Phil’s favorite books from previous blog posts was The Son Also Rises which claims social mobility is an illusion. The descendents of Norman conquerors from 1054 are still elites in Britain today,
If these kinds of “deterministic” arguments become more commonplace, will we start seeing an increase in demands for death and estate taxes? Phil likes to claim he got into MIT because it was easy back in 1982. He sells himself and his genetics short. He went to MIT, and his dad went to Harvard, and his grandfather went to Harvard, and his mother went to female Harvard. If there is such an insane genetic factor to it, then a guy like Phil should be taxed 100% of their estate value at death. Because his children will automatically have the “underlying social competence” (biological/genetic) which can’t be redistributed in any way.
As that book posits, it takes 15 generations for a family to move up or down in social hierarchy. I talked with an Egyptian born into nobility. His family was friend with the sultan back when he was around and that simply transitioned into being friends with the new “democratic” government. But they still go to the same social clubs and marry at the same elite level as the other elites.
If we really want to give a leg-up to the working-class man we should be willing at least to start things off with a blank slate. At least then upward mobility is somewhat possible, or at least the gap won’t be so pronounced. And over 15 generations, the Son still rises. So it is necessary to keep that gain from accumulating over time.
My thoughts are jumbled but I hope I’m making sense
Anon, you are so right about Amerika. This is the land of Wastrels, Nobs, and inherited wealth like no other on earth! Here are just a few examples (15 people, whose families each took 15 generations to move up the social hierarchy):
Larry Ellison (~$170B range) — Oracle cofounder. Given up for adoption as an infant; raised by relatives of modest means after Depression-era setbacks. Score typically 9.
Thomas Peterffy (~$96–107B) — Interactive Brokers founder. Arrived from Communist Hungary in 1965 nearly penniless. Score 10; often the wealthiest pure score-10 example.
Diane Hendricks (~$22B) — ABC Supply. Teen mother who dropped out; working-class dairy-farm background; later worked as a Playboy Bunny before cofounding the company. Score 9.
Harold Hamm (~$19B) — Continental Resources / oil & gas. Youngest of 13 children of Oklahoma sharecroppers; picked cotton barefoot. Score 10.
Jan Koum (~$16–19B) — WhatsApp cofounder. Immigrated from Ukraine at 16; lived on food stamps and swept floors. Score 10.
Shahid Khan (~$13–16B) — Flex-N-Gate / Jacksonville Jaguars. Arrived from Pakistan at 16 with ~$500; washed dishes while studying. High self-made score.
Ralph Lauren (~$15B) — Fashion empire. Shared a modest Bronx apartment with immigrant parents; worked as a stock boy. Score 9.
David Steward (~$12B) — World Wide Technology. Grew up in segregated Missouri as one of eight children; father worked as mechanic/janitor/trash collector. Score 10.
George Soros (~$8–9.7B) — Hedge funds / philanthropy. Survived Nazi occupation in Hungary; worked as railway porter and waiter to put himself through school. Score 10.
Oprah Winfrey (~$3B) — Media. Born into poverty in rural Mississippi to a teen mother; faced abuse and other hardships. Score 10; tops Forbes’ Self-Made 250 for distance traveled + impact.
Howard Schultz (~$3.4B) — Starbucks. Grew up in a Brooklyn housing project; first in family to graduate college. Score 10.
John Paul DeJoria (~$3.1B) — Paul Mitchell / Patrón. Foster care and periods of homelessness (lived in his car); started the hair-care company with $700. Score 10.
Additional strong matches to reach ~15 (generally lower current wealth but clear high self-made credentials)Bob Parsons (multi-billion from GoDaddy and other ventures) — Poor Baltimore upbringing; failed grades; Vietnam veteran with PTSD who taught himself to code.
LeBron James (billionaire via sports + business) — Extreme childhood housing instability and poverty in Akron; moved frequently as a child. High on Forbes Self-Made 250.
Jay-Z (Shawn Carter; multi-billion from music/business) — Raised in Brooklyn housing projects; early involvement in the drug trade before building a music and business empire.
Anon: Thank you for upgrading my grandfather from “hardware” (his father was a painter who started a paint store in Melrose, Massachusetts and my grandfather and his brother took over the business) to “Harvard”! As far as I know, my parents were the first of my ancestors to attend college. Maybe college will be outlawed soon, inshallah (as they say in Manhattan), in order to prevent a repeat of the Cornell Genocide. In that case, I will be the last of my line to have attended college!
@Anonymous, The flip side of your argument is that we have generations of families who never make it out of the swamp, no matter how much aid and assistance they receive. So, if the well-off and their children must be taxed at 100% to support those who are less well-off and their children, why haven’t the welfare system and the “Great Society” programs eliminated poverty or even reduced it? In fact the opposite has happened.
And why do countries across Africa, the Middle East, Asia, South America, and even parts of Europe remain in poverty for decades upon decades despite receiving billions in aids, when many of them were once at the forefront of civilization?
You cannot elevate failure by punishing success.
@george I am not arguing against your point. You and I are in agreement. No matter what you do, some families (typically the same) will pull ahead from the rest. No matter what you do, some will fall behind and remain mired in poverty. If you give them money they will waste it.
This will be due to genetic and historical factors. Therefore, there should be a 100% inheritance tax every single time to reset the starting line after a lifetime of wealth accumulation.
Anon: The 100% inheritance tax sounds reasonable, but how would it be collected unless the government eliminates (1) the ability of parents to give any gifts to kids, (2) all of the trust strategies that tax and estate planning lawyers currently implement, (3) the ability of Americans to transfer or spend money outside of the U.S., (4) the ability of Americans to buy and hold gold (back to the days of FDR!), etc.?
@Anonymous,
> This will be due to genetic and historical factors. Therefore, there should be a 100% inheritance tax every single time to reset the starting line after a lifetime of wealth accumulation.
Reset the starting line? That is like saying someone who has worked their ass off to win a marathon shouldn’t be allowed to run another one after winning the first. Or that Steve Jobs should have been stopped from continuing to improve the iPhone. Or that Moderna should have been forced to stop developing COVID-19 vaccines.
I know these are extreme examples, but they show why a “reset button” won’t work. Success builds on success. Knowledge, experience, innovation, and wealth can be passed down and used to create even more value. Why should we deliberately destroy that continuity in the name of equality?
And if resetting the starting line is such a brilliant idea, why stop at inheritance? Why not “reset” (i.e. terminate) families that have failed to improve their circumstances? Or, better yet, reset entire civilizations? Civilizations have risen and fallen throughout history, long before modern welfare systems existed. Clearly, there is no magic reset button that guarantees a better outcome.
You don’t create equality by punishing success, confiscating what people have built, and forcing every new generation back to square one. If you do so, you create a system that discourages people from building anything worth passing on, and thus, you end up eliminating human progress.
Anon, I totally agree with your “100% inheritance tax every single time to reset the starting line.” We as a society want to reward the dopes and cultivate the DNA of low-IQ individuals because that is of course good for our society long-term. Sort of like the Peaceful Islamic Terrorist nations of Pakistan or Somalia, where they encourage in-breeding within a family to dumb-down their IQs, and of course encourage the Cherished Islamic tradition of Child Rape, whereby someone identifying as a man can Rape their 8 year-old cousins willy-nilly.
Immigration does add a complicated twist to the above, just as it does for the “inequality crisis”. The more unsuccessful people we import, each one a cause for celebration by the Righteous, the more alarming the inequality statistic becomes to the Righteous.(Also CO2 emissions spike, since people in unsuccessful countries don’t emit a lot of CO2.) To the extent that the economists being The Son Also Rises are correct and that success has a genetic component, importing unsuccessful people who bring children or produce more here in the U.S. will increase pressure to “level the playing field” in ever-more-draconian ways.
Dumb & Dumber, thank you so much for highlighting the IQs and Cherished Traditions of Somalis! You may have seen recently that people were greatly surprised that I was so knowledgeable about World War Eleven. Of course, I learned about World War Eleven at the Esteemed Quality Learing Center in Minneapolis, where I spend time when I’m not in my home country of Somalia. Have a listen to my history lesson.
Also, check out the wonderful Quality Learing Center next time you visit! It’s of course run by the Smartest Somalis on the planet!
https://x.com/EricLDaugh/status/2109675549647900923
https://x.com/CollinRugg/status/2006031966181941687