>Generally, in exchange for such favorable terms (i.e., interest-only, matures on death), the bank will ask for a share of the collateral’s appreciation (essentially, "stock appreciation rights"), and this obligation will be settled upon the borrower’s death along with the loan.
It sounds like someone is just trading taxation for paying the lender some portion of their stock appreciation.
Presumably that's lower than what they would pay in taxes, but I wonder if that's always the case. The investment bank has a unambiguous motivation to maximize the amount of money they can make.
It seems like the most frugal approach is to minimize costs and periodically sell small amounts of your asset to cover your costs.
It sounds like someone is just trading taxation for paying the lender some portion of their stock appreciation.
Presumably that's lower than what they would pay in taxes, but I wonder if that's always the case. The investment bank has a unambiguous motivation to maximize the amount of money they can make.
It seems like the most frugal approach is to minimize costs and periodically sell small amounts of your asset to cover your costs.