[HN Gopher] The pandemic revives interest in a morbid French fin...
___________________________________________________________________
The pandemic revives interest in a morbid French financial scheme
Author : tagawa
Score : 84 points
Date : 2021-05-29 10:54 UTC (1 days ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| neonate wrote:
| https://archive.is/GRsNr
| nathanvanfleet wrote:
| thank you
| vmception wrote:
| Reminds me of assassination markets, until I saw that the current
| owner gets a third of the cash up front, thats pretty different.
| nraynaud wrote:
| There is this story that one of the oldest woman in the world had
| sold her house this way and that the buyer died before her.
| Zababa wrote:
| It is in the article, the woman was Jeanne Calment.
| sebmellen wrote:
| And she was not just "one of the oldest," but truly the
| oldest.
| nraynaud wrote:
| well, I said "one of" because the title tends to change
| hands over time.
| erdewit wrote:
| I've read recently that it may have been her daughter that
| took over her identity.
| sebmellen wrote:
| For those who may be interested in reading the article:
| https://www.smithsonianmag.com/smart-news/study-
| questions-ag....
| dredmorbius wrote:
| And that there's an inherent conflict of interest instantly
| created: anyone who could plausibly claim to be the tenant
| would retain access to free housing for at least the duration
| of their own natural life, or the life of the deception,
| whichever comes first.
|
| Elsewhere I've read that scientific evidence has shown that a
| single condition has proved more effective than any other in
| reducing maximum reported human lifetimes: accurate demographic
| data.
| exporectomy wrote:
| What I like about these schemes is they allow old people to enjoy
| the value of their property rather than enduring poverty just so
| their heirs can have an unearned pile of cash. So much value in
| the world is generated by hard working people then just dumped
| into the flaming rubbish pit of reckless children and spouses by
| inheritance. I wish inheritance wasn't the default way and you
| had to explicitly assign property in your will or otherwise for
| it to happen. The default would be that it goes to the state or
| something else not personally connected to the dead person.
| NicoJuicy wrote:
| Government already takes a big % of inheritance.
|
| That's why some people decline it too ( Belgium).
|
| Default going to the state is insane and ineffective. People
| would give it away more during their life.
| mijamo wrote:
| Well if you give it away during your life it would be taxed
| as income, so not really a problem for the state either.
| axiosgunnar wrote:
| Gifts are tax free for everyone but the 0.1%ers.
|
| It has nothing to do with income tax, since it was not
| income for work rendered - it was a gift.
| zepto wrote:
| > just so their heirs can have an _unearned_ pile of cash
|
| Do you think everyone should start out at zero and then build
| up debt until they are old enough to start working and paying
| it off?
| GlennS wrote:
| > The default would be that it goes to the state
|
| I feel like this is a fight you will never win, and it's one I
| have abandoned, but...
|
| I think a better sell would be:
|
| > The default would be that it goes to orphanages and adoption
| services
| [deleted]
| nyokodo wrote:
| > The default would be that it goes to the state
|
| Because that's less of a flaming rubbish pit of recklessness
| than family?
| andyana wrote:
| To the right state, I think it is less of such a pit, yes.
| rkk3 wrote:
| tell us when you've found one.
| andyana wrote:
| I'll do that. In the meantime, are you going to keep
| doing nothing?
| zarathustreal wrote:
| I for one will continue doing nothing, much better than
| taking steps in the wrong direction
| andyana wrote:
| Keeping active is good for you. Any steps that aren't
| towards negativity are better than none at all, I reckon.
| [deleted]
| exporectomy wrote:
| Yes. That's why we pay tax to the state, not to family
| members.
| carlmr wrote:
| This just gave me an idea. We could build houses that are
| returned to the state when we die. In return there's no
| property tax, no sales tax, no tax on repairs to the house
| during your lifetime.
|
| That way people could afford a home that is theirs until
| they (and their spouse) die.
| woah wrote:
| Homeownership is already heavily subsidized by tax breaks
| sitkack wrote:
| To banks. Those interest deductions aren't for _us_.
| ABCLAW wrote:
| We tried this. https://en.wikipedia.org/wiki/Life_estate
|
| The move from life estates and fee tails to fee simples
| was not a mistake. It was a core component of western
| society moving out of the feudal era. It's VERY difficult
| to durably invest in lands and estates otherwise.
|
| We should be railing against the return of economic
| instability and lack of access to durable wealth for the
| middle class, not accelerating our return to permanently
| unlanded peasantry.
| mucholove wrote:
| Here, the members of the state leave the pensions fund dry,
| the roads break down, the chemicals leech while they enjoy
| a private jet and get arrested when they travel to the USA
| on drug charges. Meanwhile, the prosecutor and the
| journalists trying to expose the corruption risk life and
| limb because these very same people want them dead.
|
| I personally don't want the state to see any extra money--
| in particular because this is a Republic, not a democracy
| and so, I don't even get a chance to say anything.
| ekianjo wrote:
| You pay tax to the state bevause you have to. its not like
| its ever a choice.
| enjeyw wrote:
| people choose to live in places with higher levels of
| taxes, sometimes due to the associated benefits of those
| higher taxes.
| jjk166 wrote:
| There's a difference between choosing higher taxes and
| tolerating higher taxes. Further, voting with one's feet
| is easier said than done - the overwhelming majority of
| people can't arbitrarily move wherever they like whenever
| they like.
| mosselman wrote:
| You pay taxes because you enjoy benefits in return for
| those taxes. Benefits like being protected by police, being
| cared for in hospitals, getting an education in schools,
| etc.
|
| The government doesn't need your inheritance to provide all
| this. What they need is for big companies to pay taxes as
| well. So instead of taking my money by default when I die
| instead of it going to my children, they should start by
| making businesses and the ultra rich pay proper taxes.
| exporectomy wrote:
| Yes, you enjoy benefits from paying money to the state.
| That's why we do it. Maybe ordinary tax could be reduced
| if it got more revenue from estates. I don't know. The
| point is not where the money goes, but where it doesn't
| go - as unearned windfalls to arbitrarily chosen lucky
| individuals who are often unequipped to manage it
| effectively.
| yossarian1408 wrote:
| Such a twisted view. If someone works hard their whole
| life, and wants their hard-earned (and already taxed)
| money/investments to give their children a leg-up, who
| are you to say no?
|
| So they waste half a million on a ritzy house, or spend a
| couple of months in Spain with their own kids. What's it
| to you?
| aaron-santos wrote:
| Zoom out a bit and apply systems-level thinking. We all
| know that a small number of locally applied rules lead to
| complex emergent behavior. Millions of individual
| inheritance decisions have an impact. We can choose to
| believe that people, individually making self-interested
| decisions, aggregates into a net good, but I'm not
| exactly convinced based on whatever first principles are
| in play.
| exporectomy wrote:
| I'm not saying no. I completely agree with you. You must
| have misread my comment.
| LatteLazy wrote:
| Because then you could cut income taxes for people who work
| or cap gains taxes for people who actually save. The fact you
| pay more tax on things you earned than the inheritance
| lottery is BS.
| an_opabinia wrote:
| Nothing says representative democracy like a law that would
| take your assets and give it to the one party nobody ever
| wants to give it to.
| chrismcb wrote:
| Why? So the will industry can make more money? If this was the
| default, almost everyone would immediately set up a will to
| give everything to their children . A lot of people want to
| provide for their spouse and children, even after they are
| gone.
| onlyrealcuzzo wrote:
| What happens to the old person's home when the financial
| institution goes bankrupt?
| dehrmann wrote:
| I suppose the homeowners would be the debtors, and since the
| institution went bankrupt, it presumably missed payments,
| voiding the contract?
| [deleted]
| ekianjo wrote:
| > So much value in the world is generated by hard working
| people then just dumped into the flaming rubbish pit of
| reckless children and spouses by inheritance
|
| Most of inheritance in France goes to the state which is the
| most rubbish pit of recklessness of all.
| [deleted]
| [deleted]
| joelhaus wrote:
| Worked for two brilliant founders at a startup built around this
| concept, Irene Retirement.
|
| I'd still like to believe it can be institutionalized to address
| many of the risks noted here by other comments.
| elliekelly wrote:
| This reminds me of an enterprising(?) Rhode Island lawyer/CPA
| that I think the HN crowd especially will enjoy, however
| distasteful his business might have been:
| https://www.propublica.org/article/death-takes-a-policy-how-...
| Zababa wrote:
| I don't know if I would call the system morbid. This is a way for
| someone old to get a revenue until he no longer needs it. Often
| it's used to pay for a retirement home while the people buying
| the property live in it, thus making it like paying back a
| mortgage.
| paulgb wrote:
| The buyer is essentially making a financial bet that pays out
| if a stranger will die before a certain date. Even if it's a
| mutually beneficial arrangement, that aspect feels very morbid
| to me.
| luma wrote:
| I think the key problem is that it creates an incentive for
| the hopeful buyer to see if they can't hurry the process up
| some.
| OldHand2018 wrote:
| I would imagine that if the death is even remotely
| suspicious, the beneficiary is going to be murder suspect
| #1.
| vmception wrote:
| So then the brokers are the serial killers like with life
| insurance agents, because the surviving spouse always
| gets convicted!
|
| actually, because they always get convicted I don't have
| any proof that the brokers are serial killers
|
| I just dont have any faith in how district attorneys and
| prosecutors work anymore
| exporectomy wrote:
| It's not murder to bully someone but it can shorten their
| life.
| bragh wrote:
| There are legal ways to get around it. The viager system
| is a plot device in this short story by Guy de
| Maupassant: https://americanliterature.com/author/guy-de-
| maupassant/shor...
| homarp wrote:
| which is the plot of this movie
| https://en.m.wikipedia.org/wiki/Le_Viager
| BenoitEssiambre wrote:
| Isn't this the same as most pension plans and annuities?
| fredophile wrote:
| Yes, but with something like a pension plan you're pretty
| much always dealing with a pool of people on both sides of
| the transaction. In the situation in the article you can
| have a single person on each side so a particular
| individual is making a financial bet on another specific
| individual dying sooner rather than later.
| whall6 wrote:
| So a reverse mortgage underwritten by an individual instead of a
| bank...
| dmurray wrote:
| It's a (reverse?) mortgage combined with an annuity combined
| with a forward sale.
|
| Mortgaging all of your property and buying an annuity with
| proceeds just seems like a sensible thing for anyone who is
| retired and doesn't expect to leave a significant estate.
|
| I don't really get why individuals are interested in the other
| side of the trade, though. Real estate is an annoyingly
| illiquid form of investment, so it's less attractive when you
| don't get to actually use the property.
| nkozyra wrote:
| Isn't this effectively what a reverse mortgage is in the US?
|
| You're given cash for your life up to the value of the home in
| exchange for the home when you pass
| fredophile wrote:
| I don't believe these stop at the value of your home. It's as
| long as you're alive. For most people that means they'll get
| less than the value of their home but I've heard of one case
| where a person ended up living for a long time and the
| financial instrument being sold multiple times as a result.
| It's like insurance, on average the insurance company makes
| money but they can lose a lot of it on some individuals.
| dragonwriter wrote:
| > Isn't this effectively what a reverse mortgage is in the US?
|
| There are many kinds of reverse mortgage plans, including ones
| that are functionally similar to this. (But there are also lump
| sum, fixed payment term, and other variations that aren't.) And
| even the ones that are functionally similar are technically
| different, since technically they are loans that come due at
| death secured by the property rather than a sale contract.
| mjh2539 wrote:
| It's more like an inverse life estate.
| kleton wrote:
| I had guessed from the headline that it would be the tontine.
| gjvc wrote:
| see also https://en.wikipedia.org/wiki/Tontine
| Avshalom wrote:
| The Economist was trying to sell those a while back
| https://news.ycombinator.com/item?id=14583273
| rundmc wrote:
| That was promoting Tontines rather than a Viagers. Seems like
| the sales effort was successful because the OECD recommends
| Tontines as the default pension systems now and Tontine Trust
| is launching Tontines in 27 countries in the next year.
|
| Disclosure: I'm the founder of https://tontine.com
| nathanvanfleet wrote:
| Like the episode of the Simpsons?
| rundmc wrote:
| The condensed Simpsons Tontine episode
| https://www.youtube.com/watch?v=4AqKjjhET2k
| rebuilder wrote:
| So my first thought was, I can see why this would appeal to the
| seller, but why would a buyer prefer this to getting a loan?
| There must be some way this lower cost for the buyer.
|
| My second thought was, I'd rather not sell my house if it meant
| someone was now going to directly benefit from my untimely death.
| flal_ wrote:
| It's usually largely under "regular" market value. ( but that's
| still a bet over the life expectancy of the person ). Also you
| basically don't pay interests. And in some times you can use
| the property : the seller use the money to pay for a nursing
| home for example.
___________________________________________________________________
(page generated 2021-05-30 23:01 UTC)