Yeah this is definitely missing a step somewhere. The loans have to be paid off even if you’re dead. Before your kids get anything your assets are used to pay off your debts. Unless there’s a loophole in there where the kids can assume the debts and somehow get the assets tax free, then this post doesn’t make sense.
**Edit: Ah ok the loophole is in allowing the heirs to use step up basis when inheriting the assets. The whole lifetime gains on the assets goes untaxed.
Debts will also only get paid out of their estate and never transferred on to kids or family unless it is using a joint account or the inheritors explicitly accept it. If they transfer the assets before they die, then die with 0 assets and a ton of debt, the debt just disappears (as far as their family is concerned).
Yeah this is definitely missing a step somewhere. The loans have to be paid off even if you’re dead. Before your kids get anything your assets are used to pay off your debts. Unless there’s a loophole in there where the kids can assume the debts and somehow get the assets tax free, then this post doesn’t make sense.
**Edit: Ah ok the loophole is in allowing the heirs to use step up basis when inheriting the assets. The whole lifetime gains on the assets goes untaxed.
Yeah that’s a big loophole.
Debts will also only get paid out of their estate and never transferred on to kids or family unless it is using a joint account or the inheritors explicitly accept it. If they transfer the assets before they die, then die with 0 assets and a ton of debt, the debt just disappears (as far as their family is concerned).
Unless I am understanding that loophole wrong.