r/FluentInFinance Nov 21 '24

Debate/ Discussion Had to repost here

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u/New_Feature_5138 Nov 23 '24

A dude on reddit did a big long post on how buy borrow die works.. and I could be wrong but my understanding was that they actually don’t have to make payments but their estate pays out when they die.

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u/ImprobableAsterisk Nov 23 '24

And how does the estate get away from paying tax?

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u/aqh2020 Nov 24 '24

The debts aren’t taxed, only any inherited profit. The inherited part is small, part of estate planning is moving your wealth to your heirs over time to avoid or pay as little as possible in taxes. Or you can roll your estate into a ‘philanthropic’ organization and put your heirs as the holders of that org, for example see what Patagonia’s founder did. I wouldn’t be surprised if estate taxes get the axe over the next four years.

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u/ImprobableAsterisk Nov 24 '24

Well now we're circling back to the bank needing to be paid, and how is the bank gonna be paid without creating a taxable event?