I don’t know why stuff like this keeps me up at night but let’s pretend you just won some obscene amount and there’s a lot of people you’d like to set up for life. Let’s say after taxes you have $300m in your account

You can give someone up to 18k a year without incurring a gift tax and while that’d definitely be a nice bump to their income, you still have way more money than you know what to do with. So what’s the smartest way to hook them up?

A couple of options I’ve considered are:

  1. Give them a lump sum of $X million. They eat the taxes the first year and handle the savings themselves.

  2. Create a company and hire them to “work” one hour a month for a big salary. If you put $25m in an account, the interest covers the salary. They get a steady bonus income with the added bonus of getting the best insurance available. Is that legal?

  3. Set up a “shared” checking account they can use to pay for…whatever. But would these expenses count towards the gift tax? I do not know.

  4. Buy houses and let them live there rent-free. I don’t really like this one because I don’t want to be a lord to my friends and family.

For the record, I did not win the lottery. I don’t even play it. I’m just working out the details in a fantasy world for some reason

  • @glimseOP
    4•4 months ago

    Yeah I kind of hate the lump sum option for that reason. I’m confident most of them would handle it fine but I’m POSITIVE that a few would blow it all in a year on dumb shit.

    I think the company thing is the best option even if it bumps their tax bracket - they’d only pay the higher taxes on part of it and any deductions they might be getting by being in a lower bracket would be more than made up for.

    As for the house thing, they couldn’t sell - I’d own the house! But like I said, I don’t want to be a landlord to my friends. The only type of landlording I’d do is build (GOOD QUALITY) homes and rent them to domestic abuse victims for pennies. My cousin is very involved in that sphere and I’d love to help them out - though I’d probably ask her to handle the landlord part of it (for a nice salary, of course)