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

  • @lath
    22•4 months ago

    Ok, first of all, rich people don’t pay taxes. If you paid taxes, you ain’t rich. You’re at best a parvenu upper middle class.

    Secondly, the current best way to give them money freely is to become a major investor of a company, make your friend the CEO, pay them in stock options, push the company to focus on making profit at all costs to raise stock prices and then have both you and your friend pull out right before it all comes crumbling down.

    Or so it seems to go in the US at least.