Just became a millionaire

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  • bostonerimus
    bostonerimus Posts: 5,617
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    edited 13 November 2021 at 9:52PM
    EdSwippet said:
    Fortunately, the UK and Canada both have decent US estate tax treaties, and a good estate tax treaty will blunt most or all US estate tax issues for the majority of investors from those treaty countries.

    IRS still gets you if they think you have too much worldwide assets, even if they have a treaty.  Its a state-sponsored scum. 

    Scum, or scam? But ... yes (to both!). It's the fact they rope your worldwide assets, not just your US ones, into the calculation, that causes the pain. There's credit for non-US estate taxes paid, but that might not be enough to wipe out a US estate tax liability. Blunts, but may not eliminate.

    Like you, I have investments still in the US, from having worked there. And also like you, I very much plan to extract these from the US before I croak.

    That’s good to know. As a US/UK dual citizen in the US I get the 5.5M US estate tax exemption, but if I ever return to the UK it will be very expensive when I die and as a UK resident I would not have the same freedom to gift money as I do now. I’ve talked to an estate lawyer in the US about trusts, but he said the only trust I need is for the house so it avoids probate and I was better off just giving money to family members and maybe upping my charitable contributions and moving to a state with a higher state estate tax threshold. 
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • NannaH said:
    Some people don’t seem to realise how precarious it is not to be married to a partner with significantly more in the way of assets.  Especially when they have sacrificed earning capacity to raise children.
    I hope OP has a cast iron will and good life cover with clear beneficiaries and written in trust, protecting both his partner and his children. 
    It’s far, far simpler to be married though. 
    I think OP's partner needs her head examined. She has sacrificed her earning and pension potential for many years and is totally reliant on the largesse of OP (who, apparently 'owns' most of their assets).

    Rule 1... always have your own income regardless of whether you are married
    Rule 2... never depend on a significant other (and, especially a non-spouse) to provide for you.

    I note that OP refers to 'their' (his?) assets as 'our's'. That definition will last as long as the relationship. His partner has no rights to 'his' assets other than a vicarious connection via their children.

    Sorry OP but this arrangement may work to your advantage (as I am sure you are aware) but your SO is extremely vulnerable (as I am sure you are equally aware).

    Our legal system discriminates harshly between those who are married and those who are not. 
    When I get down on one knee I'll explain all the financial benefits - that way she can't refuse me :) 
    Left is never right but I always am.
  • [Deleted User]
    [Deleted User] Posts: 0
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    edited 13 November 2021 at 9:06PM
    EdSwippet said:
    Fortunately, the UK and Canada both have decent US estate tax treaties, and a good estate tax treaty will blunt most or all US estate tax issues for the majority of investors from those treaty countries.

    IRS still gets you if they think you have too much worldwide assets, even if they have a treaty.  Its a state-sponsored scum. 

    Scum, or scam? But ... yes (to both!). It's the fact they rope your worldwide assets, not just your US ones, into the calculation, that causes the pain. There's credit for non-US estate taxes paid, but that might not be enough to wipe out a US estate tax liability. Blunts, but may not eliminate.

    Like you, I have investments still in the US, from having worked there. And also like you, I very much plan to extract these from the US before I croak.

    “Scam”, thank you :)  

    I never even lived in the US.  Wall Street offers good products…

    Canada does not tax death.  One and only thing it does not tax, but one suspects the oversight isn’t going to last.
  • resk
    resk Posts: 69
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    fizio said:
    On an earlier point I think being a ‘asset’ millionaire when you include a home and pension is within grasp of many people who are HRT with a ‘corporate’ job and the real challenge is to get to 1m excluding those 2 asset classes. Once retired its a different measure as you can downsize and access the pension fund so getting your hands on 1m is more do-able.
    Would anyone really need a million quid outside pension and house though, unless they were targeting to stop work crazy early or they spend like a rockstar?  I want to stop working before I can access my pension, but as long as my pension pot has enough for age 55/57 onwards, I only need enough in ISA/GIA/cash to meet my expenses from (say) age 45 to 55/57.  That's never going to need a million quid.  Or am I just a massive skinflint?    

    I can't agree with the suggestion / implication that some are making here, that pension pots should somehow be excluded from net worth or from stashes for funding one's post-work life.  My pension is my money, it just has rules on when I can access it and what tax I pay on it, which absolutely need to be planned for, but it's ultimately mine.  Ignoring it "because I can't access it right now" just seems really short-sighted to me.       
  • jamesd
    jamesd Posts: 26,103
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    You're clearly just a skinflint, opposite to the spendthrift Martin Lewis who gave away millions to total strangers. :)

    Whether you need a million before pension access age depends on your spending rate and that varies a lot, with people on £20k a year and 50k a year and more all potentially entirely happy with their lot.

    In reality you're just fairly normal and few will have a high enough spending rate for enough years to need a million to cover it.

  • Sea_Shell
    Sea_Shell Posts: 9,184
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    Individually, we are not "millionaires", but jointly, yes, we recently hit that milestone too, if you include our total net worth.

    £278k of that is accessible, in liquid assets 
    £185k is "available" in DH's DC pension
    £182k is not accessible for another 5 years (my DC)
    £400k is the house

    Personally, I'm at about £490k of that, with £115k of that available to me in liquid assets.
    How's it going, AKA, Nutwatch? - 12 month spends to date = 2.57% of current retirement "pot" (as at end January 2024)
  • Been a millionaire for a few years excluding property.  This is just for me as keep finances separate from wife.  Late 30s so have some time to go to build this up more though compounded returns and income.
  • Albermarle
    Albermarle Posts: 21,048
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    jamesd said:
    You're clearly just a skinflint, opposite to the spendthrift Martin Lewis who gave away millions to total strangers. :)

    Whether you need a million before pension access age depends on your spending rate and that varies a lot, with people on £20k a year and 50k a year and more all potentially entirely happy with their lot.

    In reality you're just fairly normal and few will have a high enough spending rate for enough years to need a million to cover it.

    According to the stats ( taking into account the various assumptions that are made with all statistics) a significant % of families are sitting on £1M in assets ( 15%) and with about 10% sitting on £1.5 Million.
    However  the pensions and family home ,seem to be around 75% of the assets of these better off households and the amount in risk based assets is surprisingly low .( the 25% also includes physical assets , like cars , and savings ) 
    Probably just goes to show that most people passively rely on their family home, and their work pension and do not give a lot of thought to building up significant other investments , unlike the denizens of this forum .
    Then they complain they can not afford to retire early !
  • I'm not surprised many people have £1m in assets when imo we are currently experiencing a property bubble and also equities bubble. I feel there should be a correction for both but who knows. The govts of the world as pumped so much money into the system the cost of money has been devalued. I live in an area where the average wage is below 20k but a 3 bed detached house costs 400+

    I think we have stored up a lot of problems for the future, the boe dont appear to have the confidence to raise interest rates as they know the impact it will have. if they ever get to 4 or 5 % it could be carnage unless wage inflation takes off in a dramatic way.
    It's just my opinion and not advice.
  • IamWood
    IamWood Posts: 364
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    edited 14 November 2021 at 7:54PM
    I am also thinking about the status of a 'millionaire'. I have two properties that are totally valued at around 1M -- both are paid off. My pension pot is around 500K. I don't feel it and don't count myself one at all. I'm still driving my 17-year-old car and spending with measures. 
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