In many cases, people wait until after their passing to distribute their assets through wills or trusts, leaving them to their children or loved ones.
But what if waiting to give away assets until after death isn’t the best approach?
Why not consider giving during your lifetime instead? Rather than holding onto your assets until you’re gone, why not provide them with money, property, or support while you’re still alive?
Apart from demonstrating generosity, this can bring significant financial, emotional, and even tax benefits. Here are some ways to create a win-win situation between you and your heirs by sharing wealth in advance.
The most obvious benefit? You get to see your loved ones benefit firsthand.
Whether helping grandchildren receive debt-free education, assisting a daughter in buying her first home, or supporting a small business dream, the emotional rewards of giving while alive are incomparable to any inheritance. In other words, lifetime giving can transform your wealth into real experiences.
Moreover, they will remember everything you did for them when they needed it the most, rather than just being a name on a document.
If you are a high-net-worth individual, early gifting can reduce your tax burden.
As of 2025, individuals can transfer assets worth up to $13.99 million without paying federal estate or gift taxes. For married couples, the tax-free threshold is $27.98 million.
However, it is important to note that, based on the 2017 Tax Cuts and Jobs Act, this historically high exemption amount is expected to revert to lower levels starting in 2026, possibly decreasing to around $7 million per individual. Additionally, according to the recent pass of the “Build Back Better Act” (OBBBA), the lifetime estate and gift tax exemption is expected to increase to $15 million as of January 1, 2026.
Estates exceeding the exemption amount will face a 40% federal estate tax rate.
In short, starting to gift assets now can lower your overall estate value, potentially avoiding high estate taxes in the future.
An additional benefit: you no longer have to worry about managing and distributing your estate in the future.
Apart from the lifetime exemption amount, starting in 2025, each recipient can receive tax-free gifts of $19,000 annually, which do not count towards the individual’s lifetime exemption. For married couples gifting jointly, the limit can reach $38,000.
If this practice continues for at least 10 years, you can legally and efficiently move a significant amount of wealth out of your estate.
For example, if a couple has two children and four grandchildren, they can gift up to $216,000 in assets tax-free annually.
This is not just a tax-saving strategy but a smart way to share wealth in advance and benefit future generations.
Frankly speaking, young adults in their 30s struggling to save for down payments or pay childcare costs might need your help more than adults in their 50s who already have jobs, properties, and savings. Currently, only 33% of Americans in their 30s own homes, significantly lower than the 47% in 1984, and the average age of first-time homebuyers is increasing.
Providing support in advance can help heirs when they need it the most by:
• Easing student loan burdens.
• Avoiding predatory lending or high-interest debts.
• Providing support for career transitions and development.
• Helping them establish assets and property ownership early on.
The result? Such assistance not only provides a safety net but also creates a continuous cycle of wealth accumulation.
Lifetime giving isn’t just a means of wealth transfer; it’s an opportunity to educate future generations on managing wealth. Studies show that up to 70% of family wealth is lost in intergenerational transfers, and by the third generation, 90% of the wealth is gone.
Therefore, the support you offer should be gradual and accompanied by education and guidance. You can achieve this by promoting financial literacy among heirs, such as:
• Encouraging saving and investment.
• Setting clear expectations, such as matching their contributions when they fund a project.
• Teaching budgeting and long-term financial planning.
This isn’t just about financial giving; it’s a legacy of responsibility and wisdom, a mentorship-style guidance and cultivation.
When gifting assets, it’s not only about handing over money but doing so strategically. Here are some strategic ways of giving:
• Investing in 529 education plans for grandchildren: Contributions to 529 education savings plans benefit from tax-deferred growth and remain tax-free if used for qualified educational expenses such as tuition, fees, books, room and board, learning supplies, including college, vocational schools, apprenticeships, and even K-12 education. Additionally, contributions to 529 plans are considered gifts to the beneficiaries and are excluded from estate tax calculations.
• Contributing to Roth IRA accounts for children with income: This not only helps them accumulate tax-free retirement savings early but also fosters their financial planning skills. You support their future while enjoying current tax advantages.
• Assisting with down payments on homes, helping loved ones build long-term assets: This transformative gift allows family members to invest in real estate, accumulate wealth over time, and establish stability and security, creating a long-term form of support.
These strategies not only enhance recipients’ purchasing power but also promote their financial growth and independence. It’s an expression of wise love and responsibility.
Early giving benefits not only you but also financially assists the recipients. For instance:
• You can directly pay for your children’s medical expenses or tuition to the respective providers, and such expenditures do not count towards your annual gifting limit.
• By avoiding recipients taking on high-interest debts, you can save them thousands of dollars in interest payments.
• If transferring appreciating assets (like stocks), future capital gains will be taxed at the recipients’ tax rates, which may be lower than your own.
These financial planning strategies help improve the overall efficiency and stability of family wealth.
Upon one’s passing, inheritance often leads to stress, misunderstanding, and even family disputes. However, by distributing assets through lifetime giving, many troubles can be avoided.
• If you wish to explain your decisions and intentions publicly, you can do so face-to-face.
• Relevant plans can be adjusted in real-time.
• Family members can be treated fairly and transparently.
Either way, it’s better to clarify things today than leave others confused tomorrow.
Giving assets doesn’t mean losing control. By designing appropriate giving arrangements based on your goals and heirs’ needs, you can:
• Conditional giving: such as funding education, housing, or startup costs for specific purposes.
• Establishing trust gifts: providing structured arrangements and asset protection.
• Regular giving: like yearly fixed amount donation, stable and predictable.
Through these means, you can share wealth with your family without jeopardizing your own financial security.
For many retirees, assisting others is a meaningful endeavor. Lifetime giving not only brings a sense of mission and connection but also allows you to focus on utilizing existing resources rather than solely accumulating wealth.
Through your wealth, you can support your family, finance charitable causes you care about, or simply make someone’s life a bit easier.
Perhaps we should redefine the meaning of “giving,” no longer seeing it as an end-of-life act. Pre-death giving doesn’t mean giving away all your assets but sharing what you can at the most meaningful time.
If necessary, start small. Consult your financial advisor, tax planner, and family members to devise a long-term and planned phased giving strategy. This benefits not only you but also your heirs, making it a mutually beneficial arrangement.
• Maximize annual gift exemptions. Currently, each person can gift $19,000 annually tax-free, or $38,000 for married couples, without incurring gift taxes.
• Directly pay for tuition and medical expenses. As long as these payments are made directly to educational or medical institutions, they qualify for unlimited tax-free gifting.
• Utilize 529 education savings plans and Roth IRAs, tools that support long-term financial growth and the recipients’ futures.
• Give appreciating assets rather than limiting gifts to cash.
• if necessary, establish lifetime trusts or conditional gifting structures to ensure gifts align with your wishes and plans.
• Clearly document your gifting arrangements to avoid misunderstandings or legal disputes in the future.
These strategies not only maximize the efficiency of your assets but also allow you to witness the impact and value they bring during your lifetime.
Each gift you make today could solve a problem, create an opportunity, or deepen a relationship. Unlike an inheritance, lifetime giving allows you to experience the joy of giving firsthand.
Therefore, please consider wise and early giving during your lifetime so you can generously provide while you still can.