Give Some Wealth Away Before Government Takes It
February 25, 2010 by Dr. Michael Cutler
We hear all the time about how our government is putting future generations in debt and robbing them of their wealth before they even have a chance to earn it. And then there is the death tax, which means that when you die your estate is taxed.
But a provision in the tax code makes it possible for parents and grandparents to avoid the onerous estate tax, and allows you to give a gift to your children and grandchildren to boot.
So this year, and in the years to come, think about not just giving your children and grandchildren a gift, but rather giving them the gift of wealth. And I am talking about real wealth, not paper money or some stock that can collapse in price.
When I say “real wealth,” I mean gold. Gold is a gift that has stood the test of time for 6,000 years. Gold has value today and it will have value in the future, even as paper money (fiat currency) falls by the wayside. This has been true throughout history.
The Federal Government has actually given Americans a way to give a portion of their estate to future generations without owing any taxes on the gift. As long as you stay within the IRS gifting limits, this can be an excellent way to help ensure the financial freedom of your loved ones. (And not insignificantly, it will help you and your spouse save on taxes, too.)
In 2010 the gifting limit is $13,000 per person. A married couple can give twice that much, or $26,000, to children or grandchildren, nephews or nieces, or anyone else. Many of our clients have already taken advantage of this wealth-transfer tool by giving stocks, bonds and real estate to their offspring. Today, I’m suggesting you consider the gift of gold (and silver and platinum) as well.
Imagine if you gave a child a gift of gold every year. Think about the path you will start them on toward achieving their own financial goals. You can give them a cornerstone of financial wealth—real wealth—on which they can build. If a child or grandchild owns some gold do you think they will pay attention to what government is doing to the dollar and what is happening with the price of gold? You betcha!
As Americans, we are still learning to be comfortable owning gold in our investment portfolio. After all, we went 42 years—from 1933 until 1975—when government edict made it illegal to own gold. Thus, it’s understandable that we are not in the habit of owning and giving gold.
Other cultures around the world understand the value of gifting gold and silver to the next generation. In India and the Far East, giving gold has been part of their tradition for generations. As an article in the Bombay Times observed, “From mother to daughter to granddaughter (and father to son to grandson), gold has the tendency of getting passed down from generation to generation.”
In Europe as well, the private (and often secret) ownership of gold goes back to feudal times, whether it is stored in a vault or hidden somewhere at home. More than one family has made it through the ravages of war or political upheaval thanks to those golden pieces of hope.
What to Give
You have many choices when it comes to giving gold or silver, from putting a coin in a Christmas stocking to purchasing several thousand dollars worth of metal through a Perth Mint Certificate.
There are many occasions throughout the year that are worthy of recognition. A child’s birthday. His or her graduation. Your own birthday or anniversary. Christmas or Hanukkah. You can probably think of many more.
Besides gold coins, consider the solid-gold jewelry from our sister company, First Collectors Guild. In whatever form you give it, the gift of gold can teach lessons that will last a lifetime.
And don’t forget about silver, the “poor man’s gold.” The U.S. silver Eagles are as beautiful as they are meaningful. Right now, gold and silver are the lowest they’ve been in many weeks. If you’re looking for the right time to buy, this is it. Consider buying enough now for several future gift-giving opportunities. There are many advantages to “buying in bulk.” For example, premiums, shipping and insurance costs are lower when spread over several coins. Plus, you are protected from the (likely) future price increases.
Gold Is Forever
I hope you’ll consider the many advantages of gifting gold and silver to your loved ones. Think how good you will feel knowing that you have helped provide for your children’s or grandchildren’s financial future—and their education about the value of real money.
In addition to the emotional rewards, don’t forget about the physical ones, too. The gift of gold is a great way to provide for your offsprings’ future, while you save taxes in your own estate.
What a wonderful legacy to leave—one that is “as good as gold,” because it is gold.