How Bill Gates and Warren Buffett Estates Will Pay ZERO Estate Tax

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Bill Gates and Warren Buffett are two of the wealthiest people in the world. So how with their estates escape the 40% estate tax that the government would expect to get when they pass away.
Each of them has an estate that is valued somewhere in the neighborhood of $100 billion. So you would think that, at their death, billions would be due to the IRS in the form of the federal estate tax within nine months of the date they passed away.
Let's look at an example of a married couple that has, compared to these two, a "measly" $1 billion estate. After both of those spouses die leaving their estate to their children, their estates will owe about $390 million to the IRS.
Here's how they will get around the estate tax:
When the first spouse dies, that spouse can leave their estate to or for the surviving spouse, so long as the bequest qualified under the unlimited estate tax marital deduction. Then, when the surviving spouse dies, the surviving spouse will leave their estate to a charity or charities pursuant to the unlimited estate tax charitable deduction.
Perhaps they are thinking that instead of leaving billions to their kids, and billions to the United States Treasury, they will leave "enough" to their kids with the bulk going to charitable causes. Perhaps they think that the charities can more efficiently use their resources to do good, more so than the United States government could.
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This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.
Paul Rabalais
Estate Planning Attorney
www.RabalaisEstatePlanning.com
Phone: [phone]

[@FakePersonna]

save you all 14 minutes.... they leave the $$$ to charity.

[@johnbailey3351]

Thanks!

[@raylopez99]

What about Melinda, before she dies, remarrying a much younger man? Then the younger man gets the unlimited marital deduction. And before the younger man dies, he can remarry a much younger woman. And before the much younger woman dies, she can remarry a much younger man, and so on? Sounds like a nice loophole.

[@robertthomas5906]

Now they're divorcing... So...

[@NaveDelAmor]

@@robertthomas5906 shell inherit a foundation or her half....well, if Bill allows it ;) it's his money ;)

[@slimdawgwoof]

Thanks for making your videos. I have learned a lot from you.

[@americasestateplanninglawy1946]

Thanks for watching SD. I have learned a lot by making them.

[@hivolco151]

very interesting information... Thank you so much for sharing!

[@dalgguitars]

Thank you for your video.

[@CODandponies]

I like how one person put it, if you're not comfortable calling your pile of stuff an estate you probably don't have to worry about estate tax

[@hanflieu1425]

So good thank you lesson learned 👍

[@jaystrand4958]

Mr. Rabelais, thank you for the federal estate tax planning information. Just a question about State taxes. Do states usually provide exemption levels as well? Thank You

[@rwess]

Makes sense. So how easy or hard is it to set up Charitable Foundation? Any good sources of info.?

[@AnnMitt]

Paul, Please do a follow-up video post the new tax increase that congress will pass ~ Fall 2021. Please evaluate this scenario: Single mom has an estate worth $3 million (includes house) and has two sons. FYI... this single mom worked very hard as a nurse, invested in a 403b and Roth IRA and lived a very frugal life. She'd like to leave her hard earned estate to her sons and not have 45% of 2 million go to the government. Thanks in advance.

[@obrientracy1]

I am a regular listener to ur video's but u said u would tell us what ur estate plan is to avoid tax,but the only thing u said is that ur not doing a charitable trust,but never told us the rest. Will u plan on each setting up a trust,separately,or will u do a "Rabalais Family Trust" and title ur estate assets that way? This is the info we want to kno, more relatable to the average joe. No one can relate to the Buffets and Gates,ha!

[@carolchop8423]

I agree. I was waiting on "How" you plan to avoid paying the Estate Tax in your situation.

[@dudlyspudly4804]

He is going to spend his money while he is earning it. Etc. kids private school and college. So he isn’t building his estate pass the 22 million. Easy Pesy . So you just have to keep up with the current estate laws to see what that maximum you can pass onto your kids.

[@dlrowadkcuf]

Aaahmazin!

[@MarkWingo]

Why should their family pay taxes, the tax has already been paid on the assets in his estate.

[@untitled6391]

It's a way to redistribute wealth while still allowing the future generations of the rich to live comfortably

[@maggie-iv6ot]

Get em Paul

[@Didymus1984]

Please, give it all to your kids, Bill! Please!!!

[@bones8057]

Thanks for the vid but you didn't mention 'portability' for us mere mortals.

[@earlscheib7754]

Now I have to work on building an estate large enough to be subjected to estate tax

[@notreal6032]

Is there not some way to get that money back to the heirs via annuity or something?

[@SgtBooker44]

So they leave their money to a charity run buy their kids to run, who have unlimited access.

[@porthossniff7573]

Could they not require the charity to pay the kids something forever? Kids gran kid Great grandkids and so on.

[@rusilver2]

revisit this video when they drop the exemption to 1 million .....

[@dianereiser6417]

They could pay down the deficit with all that money, what a shame.

[@godofwar4276]

That's for plebs like you and I to do. When Liz Warren proposed wealth tax, Billy Gates whined like a little girl. Yethe keeps advocating for raising our taxes.

[@shanechostetler9997]

Not a chance, you could confiscate their total net worth, and it wouldn’t cover the annual interest costs in the Federal budget.

[@CycleGirl-77]

Giving money to the government is just slightly more useful than setting it on fire. Have you looked at where all the money goes?

[@franmaud3030]

And why in the world would they do that.?

[@Rainy_Day12234]

We have a massive spending problem, tax revenues are at a all time high.

[@littlehoss100]

Dear God, get on with it!

[@rogerpullin8997]

I thought Bill was getting a divorce

[@nelskrogh3238]

Should warn about some states going after estates.

[@traptown5611]

Rabalais Estate Planning, LLC

[@ramakrishnaom]

Why did you rush thru on how you avoid the estate tax, can you clarify more on it please

[@2901nc]

Thanks for the perspective! Congress will rarely tax their interests too heavily (or their heavy donors). Those might be useful to watch. Something will happen prior to the expiration.

[@americasestateplanninglawy1946]

You always have good observations C4!

[@cybrainx72]

You can skip the warm rant till 3:50

[@shanechostetler9997]

Finally somebody exposing their hypocrisy.

[@buzzpedrotti5401]

Huh. What hypocrisy? They give it away. How is that hypocrisy?

[@laureldevine]

@@buzzpedrotti5401 Are you REALLY that dumb????

[@franmaud3030]

Morality if you have too much money create a foundation to park it. Also another way to protect your money is to befriend with powerful people. A call to say a congressman when a law doesn’t go your way can be very useful. A past candidate to the presidency explained it very clearly few years ago his name Ross Perot .

[@HaveaGreatDayEveryone]

So anything under 23mil (or 11.5mil later) is estate tax free? But billionaires still don’t pay into our tax system. Thanks for the info.

[@Closeprobate]

There’s a “whole lot of middle” to this video. Say what you’re going to say and then say it.

[@pavitanand8223]

So if you don't die this year, how would you have taken advantage of the $23.4M exemption now? From your other videos I believe you can put what you have NOW into a trust and take some of the exemption, but what about the assets that you make beyond this year? If your

[@justjacqueline2004]

Are UK residents able to seek shelter in USA tax laws?

[@untitled6391]

Does anyone check on these charities to see if they are actually doing charitable things?

[@albericparadiso9816]

Man this guy has a hard time spitting it out

[@philipdamask2279]

What will you do when the new death tax limit is 4 million?

[@jeroldpaquette9068]

I do not share Paul’s supposition that charities are more efficient and “charitable”. Example: the president of a LARGE old line US charity gets paid a couple of million $ each year!

[@gregorylynncarawayttee8900]

CAN I DO THE SAME WITH AN ENDOWMENT

[@gregorylynncarawayttee8900]

Thanks

[@1214101]

How do the really rich not pay estate tax and not give it to charity? An example, is one of the Mars family died a few years ago. I think they had 3 kids, there net worth according to Forbes is the same together as the parent that died. So if that’s true, how did they achieve that?

[@greendoorinvestments]

bill doing good in the world, that's funny

[@donmountford797]

While there is plenty of negative around him and he is likely very guilty, his money is doing good in the world. His health and anti poverty projects in Africa is a huge success. His education funding in the United States has been far less successful

[@greendoorinvestments]

@@donmountford797 funny.... keep researching

[@donmountford797]

@@greendoorinvestments I am well aware of the accusations around his personal behavior. Like him or hate him, he has given billions of dollars that have helped reduce poverty and disease in Africa. His efforts here have mostly failed to move the needle.

[@greendoorinvestments]

@@donmountford797 are you aware of the GMO mosquitoes that he released or the poisoned vax he is deep State can't defend it...he bought the software his mother got it sold ibm it's all a big plan

[@donmountford797]

@@greendoorinvestments I personally am pro vaccine so I am happy with that. The releasing of the mosquito s sea high risk/high reward. It may be great or it could be horrible. Time will tell. He has afforded billions of gallons of drinking water, helped reduce aids and malaria throughout Africa. Those positives don't go away because he has failed on some of his ideas or because of his personal immoral behavior

[@alanjswanner844]

Herein lies the problem

[@marg22az]

Not that crazy rich.

[@jaimesantiesteban1900]

Thank you for making your videos My uncle has named me a successor trustee on his revocable trust I am also one of two beneficiaries His trust is set up to run indefinitely The trust owns real estate in multiple states The beneficiaries will receive the monthly rents Does not seem to me like this can last in definitely. What happens to the trust as the successor trustee and beneficiaries pass away? How long can a trust continue after someone’s death? Even though the instructions of the trust are to continue indefinitely and only pay out rents. I wish to honor my uncle‘s wishes but I’m not sure It can technically be done.

[@retlcdrusn]

And the charity has a chairman, who a heir, who gets a fat salary

[@crystaldemons207]

If Gates owes 40% then if he's can't pay the tax with cash money or by principal cash alone and not assets first, how do you legally pay all that cash without liquidating your home or assets? In step order? Because the year of his death he has one more income tax as well, capital gains associated with his income and his assets are attached to his income..lol I know it generalizing. Lol I'm trying to imagine how many creditor leins he may imposed, government loans too or revolving door credits he may have that he used to hoard his wealth..😆 not to mention hedge funds and probably credit suisse..lol I don't think many people have the inside tract of all his lienholders.. don't forget royalties that end with death..lol

[@aslau3820]

I’m not sure they are “taking advantage” of the system per se, they are playing by the current rules, which are available to every taxpayer.

[@shanechostetler9997]

But they have the audacity to say that our taxes aren’t high enough.

[@walterbrown8694]

Can you spell "INTER- VIVOS TRUST" boys and girls ? (PS - Ya don't gotta be filthy rich to set up one of these )

[@greekjeff]

Bill and Melinda (ex-wife)are not together!

[@ladypilliwick8179]

never stopped talking. never said anything. must have needed to make the vedio a certain length so just added filler

[@dbadaddy7386]

Consider that both men have said on the record that they should pay more in taxes as the moral and right thing to do. Consider also that they currently have the ability to voluntarily pay more in taxes right now by not taking deductions (because no law requires them to take deductions), but don't. If paying more in taxes is the moral and right thing to do, and they have the ability to do so right now but refuse to do so until forced to do so, what does that say what they really think about paying more in taxes? What does it say about them personally for refusing to do without force what they say is the right thing to do and they have the ability to do right now?

[@rajbeekie7124]

Your comparisons are terrible. Leaving money to kids and leaving money for charity are very different. If the rich guy did the same, he would also pay 0 Federal tax.

[@buzzpedrotti5401]

If you give it.all to a charity, your kids get nothing. No?

[@laureldevine]

No. They RUN the charity and can take distributions, salaries, etc.

[@drewhenkel3987]

Too wordy

[@AjitMD]

Anybody who started a business like Bill Gates, Bezos, etc owns a lot of shares their company with near $0 cost basis. When they die, these shares are valued at cost basis for estate tax purposes… meaning, very little estate. The shares can go to a Perpetual Dynasty Trust in a state like South Dakota or Nevada… tax free. The cost basis get marked to market upon death. If sold immediately $0 capital gain tax. The trust can convert shares to SP-500… grows 10% per year. No estate tax ever. Trust fund kids, etc live off dividends at 20% max tax. Folks who invested in real estate early on, write off 75% of value in 29 years. Use 1031 exchange to never pay capital gain taxes. Low cost basis… do the same as above. IRA are tax traps… and even Roth IRAs for hi net worth are also tax traps. About to get worse. May be one of Mr R. kids can get S. Dakota or Nevada license? USA tax laws have large loopholes you can drive Fort Know full through and not pay much toll. Pay only if not wealthy enough.

[@ericchen1205]

I am not sure you are correct saying "hese shares are valued at cost basis for estate tax purposes... meaning very little estate". The estate tax is calculated on FMV of the asset at the time of death (and get a step up on cost basis after paying the estate tax, but that's a different topic), not the original cost basis....

[@SdDawg-yw5qk]

Why is this video 15 minutes long? Hope you don’t charge by the hour! 1. Unlimited marital deduction for the first spouse to die. 2. Unlimited charitable donation 3. Lifetime gift exclusion It’s really easy if you’re willing to give it to a charity instead of the feds. What people want to know is what their heirs can do with the charitable foundation you’ve setup and funded because it will not be their personal piggy bank.

[@seanknox7321]

this guy loves to talk... hasnt figured out youtube yet.

[@cheryldodd-marko9787]

🕊🇺🇲💕

[@cindydufala7646]

The logoc of give it to charity, as charity does what govt does not do, the fairness tp all, ie inequity of lesser tax brackets, assumes charoty actually does do good for the gppd of all. Highly doubt it as the payroll pf zuch cgarurable organizatipns heads of those organizations make a lot of loot. Nah. Pay your fair share whomever you are. On one had merit to be married and on the other hand politicians promote being sinlfr with children and dependendents so himans become assets of the govt. We're all slaves to the wealthy that have foundations. Fpr generations. Balance that mulri trillion dollars spending. Money in monwy pit any given tax year Mope. They'll bote o. Stuff once IN congress to ladt beyong their ywars on eartn. Only their offsprong bemwfit as they end up politicians keeping that greed alive.

[@user-ll4lf5go1m]

Which is one of the major problems in this country. Super rich pay no taxes. Half of all wealth in the US is owned by 1% of the population. And that is a MAJOR problem.

[@rgarri6396]

Start saving and investing and you will be rich. Then you can bitch about taxes with us! Or would you rather wait for your free government handouts ?

[@laureldevine]

I'm sorry but I couldn't watch this. 10 minutes in and all I am hearing is how wonderful Bill and Melinda are. I want estate tax advice, not political opinions, you really need to get to the point. In addition, this didn't age well now that we know good old Bill was besties with Jeffery Epstein and Melinda is divorcing him over the embarrassment over everything coming out. I think you should stick to estate tax info.

[@jacksonchapman8390]

You talked for 14 minutes- you could have answered in 4 minutes tops- do you fantasize you're so charming e want to hear you DRONE on and on?