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Give Some Wealth Away Before Government Takes It

February 25, 2010 by  

Give Some Wealth Away Before Government Takes It

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.

Gifting Limits

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.

Building Wealth

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.

—Michael Checkan

Special To Personal Liberty

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  • Tweety

    Mr. Checkan says, “Gold is a gift that has stood the test of time for 6,000 years.” I guess he doesn’t count the period between 1980 to 1999 when the inflation adjusted price of bullion fell from $840 per ounce to $120.

    • DaveH

      The high price (about $850) was a very short-lived frenzy price. And I’m not aware of Gold going below $250 during the stated years. Do you have proof for your stated low?
      Notice from the chart below that it started rising dramatically between 1976 and 1980, the years that Jimmy Carter was in office. He was also a far-left Liberal who thought the Government could best control an economy. The result was nasty inflation and a weak economy for about 3 or 4 years.

    • s c

      Tweety, I can only hope that you are much more intelligent than you seem. It is no accomplishment to fool young people into believing that nothing can go wrong in life. Some people fool themselves, and can find ways to put absolute faith in those who want to be seen as infallible.
      Unless you’ve been living in a cave and you have no access to a functional media outlet, you have been deceived. Please tell us that Mary Poppins is not your hero. Tell us that you know Peter Pan is not real. Tell us that world peace can’t be had by surrendering to a philosophy.
      America is in the path of an economic tsunami that can’t be stopped. This coming storm was created by people who never deserved to be called leaders. The root of this disaster is the battle between good and evil, and when the true identity of the many players is revealed, it will be too late.
      You have very little time to educate yourself. I can only hope tha you are at least 18, and that you do not view any politcian, religious leader, parent, friend or public figure as infallible.

      • Tweety

        SC,
        you saying that the great bear market in gold didn’t happen between 1980 and 1999? Well it did and some investors rode it all the way to the bottom. In early 1980 bullion topped out at $840. In August 1998 same ounce you bought was selling for $284.11. But wait SC. That’s ounce is now fetching 1998 dollars not 1980 dollars. If you do the constant dollar math you see that $284 was only worth $127. That’s the hard economics of it. Therefore I think you are the one in the cave having tea with Peter Pan.

        • DaveH

          You weren’t talking inflation-adjusted dollars in your original comment.

          • DaveH

            Oops. Sorry Tweety, I re-read and saw you were.

          • s c

            DaveH, Tweety doesn’t get it. He’s been thoroughly programmed, and without intervention, he’ll never get it. I tried to be fairly polite, but when you’re dealing with people who think fantasy is a new-and-improved version of reality, it’s always a daily challenge.
            Like they say, you can lead an ultraliberal progressive to reason, but you can’t make him think. When the stuff hits the fan is when he’ll ‘get it’ – in more ways than one.

  • Conservative Carl

    This is great advice and it may pay me to check with my tax advisor to see about tax consequences our children and grandchildren might incur upon inheriting our meager estate. Unfortunately the federal and state governments have not seen a tax they didn’t like – except for one tax in South Carolina. The cigarette tax is still the lowest in the nation despite the added costs of healthcare for treating those with smoking related diseases. We know a woman in her early 50s with COPD who continues to smoke and she is getting disability income from the government.
    Increase the cigarette tax and cut out the estate taxes is what I say.

    • Fed Up Gal in NM

      Conservative Carl,

      I tend to agree with you. Personally, I think any government that has a “death” tax on anything is shameful. I don’t think property should be taxed (at all); otherwise it’s paramount to the government owning it’s citizens lock, stock, and barrel. I know some smart alec will bring on the emotional pity party that someone out there can use what the deceased left behind….but that’s sick in my opinion.

      Still not sure, but I’ve been giving more thought to the Fair Tax and I don’t think I’d mind paying a tax on luxury items, but I think it’s perrenial theft to tax residential property (before or after death), food, traditional or alternative health treatments. I’m sure there’s no perfect solution, but that does not justify the thievery that’s going on now and has been for some time…and will likely get worse under the present regime.

      Fed Up Gal

  • Rod

    Looks like if you bought at $120, it’s 1100+ now.

    I think that would be standing the test of time?

  • Penni Eads

    What does gold and silver do for you in a time of crisis? How can it be used as exchange at a business if there isn’t a certain value known by the business or by the consumer? I do not yet own gold or silver. I am following it with interest. How is it used or is it for prestige? Food and shelter are paramount in any crisis, so what can gold and silver do for you? Please explain. I am a conservative through and through, but I don’t understand the gold thing. I understand it in the beginning of our country and feel it is evil for the government to no longer back up the dollar with gold, but how can it be used now when there is not enough knowledge of how to purchase, store, and use precious metals?

    • Josie60

      Hey Penni
      I have been looking for just that info myself. Who and what to trust or believe is a big factor for me. Trying to stay informed but can’t get all the pieces put together with answers to questions you asked of How, What, Where! Then there’s the issue of who to trust and not get snookerd in some scheme after we all by gold etc and someone decides to pull the plug on that also. Then what? It does make me wonder about the “cash for gold” companies that have sprung up all of a sudden.
      Hope for the best and prepare for the worst is easier said than done. Anyone out there have specifics?

    • American Citizen

      I have the same questions. You can’t eat gold, how would we spend it? If it’s so great, why would I send my gold jewelry to them. Think I’ll hang onto it.

    • s c

      Penni, many years ago, I was told to 1) be prepared to barter 2) put faith in things that hold their value (gold and silver) 3) NEVER surrender to a herd mentality (but none of my friends . . . and 4) live in a community where you can get IN or OUT in 15 minutes or less.
      Now that we have King Obummer in the White House, I’d add a fifth word of advice. That is, if you don’t have independent media sources to help you understand what’s REALLY going on here and around the world, GET ONE and DO IT NOW!

  • Mike Papademetriou

    Dave H is right when he said:

    “Notice from the chart below that it started rising dramatically between 1976 and 1980, the years that Jimmy Carter was in office. He was also a far-left Liberal who thought the Government could best control an economy. The result was nasty inflation and a weak economy for about 3 or 4 years.”

    Also notice in the same chart ( http://en.wikipedia.org/wiki/F…..in_USD.png) that it started rising dramatically between 2002 and 2009, the years that George W was in office. He was a far-right Conservative who thought the Banks and mega corporations could best control an economy. The result is the nasty near depression recession and the weak economy for the last 6-8 years.

    Gold could be a good investment when purchased at good economic times – not now.

    • s c

      Mike, PLEASE give up on the idea that George Bush was or is a ‘far-right conservative.’ Yes, he was under several thumbs and he did not think of the American people as his masters, but he and his father are cut from the same, flawed cloth.
      Friends who share your beliefs will tell you the same thing(s) [or should]. Mike, if George Bush is or was a far-right conservative, then that makes me an ancient being who learned long ago how to become a time-traveling immortal.
      I have no argument with most of your comment, but we still have people amongst us who want to believe that Bush was a far-right conservative. Anyone who acts like he has a license to spend other people’s money or put future generations in perpetual debt is NO conservative. George Bush willingly surrendered the right to be seen as any kind of conservative
      many years ago. It just took him a while before he thought he could act the part and get away with it.
      That’s the way it is, and no one can change it, Mike.

    • Conservative Carl

      Mike is wrong about George Bush being a conservative (he’s a New World Order guy) and he is also wrong about gold. Gold will go back up and foreign nations are buying a lot of it. My experience is that the small amount I bought is at least double if not triple value of what I paid several years ago. The value does have slight fluctuations but always goes up in value above purchase price. Silver is a good investment also.

  • Keith

    I own commercial property. I also have a mortgage to pay on it. I would love to give my children a portion of that real estate. I would like to deed to them part of that property every year until I reach the point where death duties are not charged.
    However, this property has depreciated over the years, and the price of real estate has taken a nose dive, as a result of all this, if I died during the current state of the economy, my heirs might end up with a debt. Are my children taking a financial risk accepting my “gifts” and could I saddle them with a debt to be paid by them after my demise.
    If so, it may not be wise to divide my property at this time. I would appreciate your comments.

  • John

    I am sorry but ther is nothing left to give away that the fools in washington have’nt already taken.get a calculator and do the math.

  • AMELIA

    ONE OF THE FEW INTELLIGENT SITES I’VE SEEN. I APPRECIATE THE DIFFERENT VIEWPOINTS. THANKS, GRANDMOTHER

    • American Citizen

      Why don’t we all just sell what we have and go on the dole?

      • American Citizen

        Forgot the rest of it. What would Washington do then?

  • David of Hawaii

    Stealing our money via the IRS is more proof that CONGRESS IS BROKE. Say:
    NO to complicated IRS Tax laws
    NO More Career Congress Persons.
    NO to any Congress Person with over 12 years.
    NO to Congressional retirement and perks
    NO to Congress having different Health Care AND Retirement Plan than they give us. Take back the money they stole
    NO to lobbyists
    NO to Congressional corruption
    NO to bailout of large corporations
    NO to CEO bonuses on taxpayer money
    NO to Derivatives and other money laundering
    NO to lending money you don’t have in hand
    NO to brokers selling & repackaging mortgages
    NO to credit card interest above 10%
    NO to tax breaks for overseas manufacturing and out sourcing
    NO to foreign oil
    NO to unequal Money Base. Use cost of top 100 items; bread, meat, milk, small car, small house of each country to compare
    YES TO VOTER POWER.

    Pass this to all your friends over and over EVERY election till they “VOTE” NO More Career Congress Persons.

    • Josie60

      Great List. I would add No to the Fed Reserve Bank

    • s c

      Oorah to most of what you said, David. However, to SOLVE certain problems, you MUST a) go for the jugular or b) cut the head off the serpent. To surrender to the idea that we will (somehow) restore sanity to the Washington crowd is to admit that the problem isn’t all that bad and that we can (somehow) get used to it.
      When it comes to career criminals [politicians], we will NEVER have term limits. You’re dealing with career criminals who know what they stand to lose if America get term limits imposed on those sons-and-daughters of slime.
      BREAK the chains of consecutive terms, David. NO ONE is worth it. Look deeper. See what you MUST see. Forget what you want to see. NO CONSECUTIVE TERMS is THE SOLUTION.

  • Michael

    give kids gold

    If I give my kids 260 US issued $50.00 gold coins face value $13,000
    it would be tax exempt since this is legal tender for all debts public and private.

    in this case inflation works against the government since the Federal reserve note value would be $286,000

    One must realize we have two monetary systems in this country. one created by the fed that robs us blind through inflation.

    and constitutionally sound US mint issued gold and silver coin.

    Give children real money give IRS worhtless federal reserve notes

  • s c

    Some readers have a hard time calling a moonbat a moonbat, so I’ll say it for you. Who the hell does Obummer think he is? He got elected because a lot of incredibly ignorant people think he can walk on water and everything will be peachy because Obummer was taught how to lie many years ago (and conservatives were stuck with a non-candidate who amounts to an arlen specter-type role model).
    When government tells its citizens that only government can donate or control money, the message is crystal clear [to those who CARE about being free, i. e.]. This is government’s way of telling freedom-lovers that freedom is actively being destroyed by those who have sworn to keep America free (so much for oaths, eh?).
    Obummer and all of his bum chums need a serious dose of reality. If they have to learn the hard way, sobeit. If they fall from their perverted grace, sobeit. If they have to move to another country, sobeit. We can’t afford to tolerate or accept or be concerned with a big tent. The remedy is simple and highly effective. Our founders knew the remedy. Sobeit!

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