Many families are choosing to gift assets to their children during their lifetime so they can see the impact firsthand. Before moving forward, it’s important to understand what you’re giving and the long-term implications of that decision.
Read the full transcript
Austin, lately there’s a lot of buzz around gifting to your kids during your lifetime so that you can enjoy their enjoyment while you’re still alive. What are the pros and cons?
It’s a great question. So what you’re really asking is, can I afford to pre-fund my inheritance?
And so the first thing you have to figure out is, who’s going to pay the taxes? What asset am I going to give?
Because while it’s great to see kids enjoy money, you have to remember you can never ask for itback.
And so it’s really important to understand the trade-offs and to run that detailed financial plan. So if you do have $250,000, $500,000 missing from your financial plan, that it’s not going to inhibit any of your own personal lifestyle or expenses.
So our job is to help our clients quantify those trade-offs of giving assets earlier in their lives.
We think so.