If you have less than a 5 million dollar estate, you can leave your wealth to your heirs tax free. But let's pretend that you have 7 million in assets- thats 2 million over the tax free limit. When you pass, your children will owe 40% of that 2 million to Uncle Sam, or $800,000 in taxes. So you decide, let me find one of those proverbial "tax loopholes" all these rich people exploit at the cost of everyone else (Remember that Mitt Romney guy?) Well, what are your options? You can start a Foundation and put your money there like the Clintons, the Gates, amongst many other wealthy people out there. Sure, you and your children won't have to pay taxes, but you and your children will owe 5% of the net assets of the Foundation, including investment income, every single year in perpetuity to other charitable organizations. In 8 years, that's 40%. And you cannot hire your kid and give him the 5% in salary (which is a good thing IMO) So how is this a "loophole?" You're not paying taxes but you're donating 5% of your assets to charity every. single. year. Now that's great to do charity, but for God's sake, please stop calling these loopholes for the rich. They are not! By no means are these rich people getting to keep their money by exploiting these "loopholes." Your other options are spending everything over 5 million, or just having your kids pay 40% in taxes.