Give Money to Adult Kids Now Rather Than Leave an Inheritance
Financial advisers say gifting assets during your lifetime can benefit heirs more than a bequest — if done carefully.
Many Americans with accumulated wealth are reconsidering the traditional approach of passing assets to children and grandchildren through inheritance, instead choosing to transfer money while they are still alive — a strategy financial planners call "giving while living."
Advocates of the approach argue that timely gifts can have a far greater impact on a recipient's life. A down payment on a first home, help eliminating student debt, or seed capital for a small business can reshape a young adult's financial trajectory in ways that an inheritance received decades later simply cannot replicate.
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The strategy carries meaningful tax implications worth weighing. Under current federal rules, individuals can give up to a set annual amount per recipient without triggering gift-tax reporting requirements, and the lifetime estate-and-gift-tax exemption remains historically elevated — though scheduled changes to tax law could alter that picture in coming years.
Financial advisers caution, however, that generosity must not come at the expense of the donor's own retirement security. Experts recommend stress-testing your own financial plan before committing to significant transfers, factoring in longevity risk, healthcare costs, and the possibility that market conditions could erode a portfolio faster than anticipated. The guiding principle: secure your own financial oxygen mask first.
Balancing family generosity with personal financial resilience is the central tension in any giving-while-living plan, and professional guidance is widely recommended before making large irrevocable transfers. Continue reading at MarketWatch.com
