Buy, Borrow, Die: How the Wealth Strategy Works

“Buy, Borrow, Die” is shorthand for holding appreciating assets, borrowing against them instead of selling, and eventually transferring assets at death. The phrase is memorable, but it compresses several different systems—investment risk, lending, federal and state taxation, estate administration, and family planning—into three words.

Borrowed money is generally different from sale proceeds because a loan creates a repayment obligation. That does not make borrowing free or automatically tax-efficient. Interest compounds, collateral values can fall, lenders can change advance requirements, and a borrower may need income or liquidity to service debt. A forced sale can create the very tax event the strategy was intended to postpone.

The “die” portion is also more complicated than the slogan suggests. Basis rules, ownership form, estate size, trusts, debts, depreciation, state law, and changes in federal law can alter the result. A step-up in basis should never be described as guaranteed for every asset or family.

Use this guide carefully

Use the resources below to understand terminology and develop questions. Do not use this page as a personalized tax, legal, estate-planning, lending, or investment recommendation. Anyone considering a real transaction should obtain advice from professionals who can review the assets, loans, documents, jurisdiction, cash flow, heirs, and current law.