Gift-giving strategies provide a way to share your wealth with a long-term impact. Whether you are gifting to family members and future generations or community and society or causes that matter to you, it is important to be well informed about the pros and cons for each giving option. Also, to spend your money wisely, keep in mind any potential tax consequences and your wealth planning goals.
Intrafamily gifting: Keeping it in the family
You may find interfamily loans attractive when looking for ways to give to family members for a desired purchase or investment. With high school graduation on the horizon, you may be looking to help family members with college costs. Or you may want to help college grads with loan repayment or newlyweds with their first home purchase. Before making any gift to family members, it is imperative to explore all available options, from an outright gift to a federal annual gift to establishing a trust.
Charitable giving: For the causes you care about
The continued success of many non-profit organizations relies heavily on philanthropy. Charitable giving can be a powerful financial tool and several options are available — each with unique benefits and disadvantages. Work with your financial advisor to map out a charitable giving plan that meets your wealth distribution goals.
Lifetime gifting: Leave your legacy for future generations
Like many people, you may have put off discussing your financial legacy because discussions about life’s end are sensitive. Developing your legacy plan now allows you to make clearheaded choices about your finances. It allows your loved ones to act on your behalf with confidence, knowing they are distributing your wealth according to your wishes. It may also help you to reduce the impact of estate and gift taxes.
What monetary gift-giving strategies fit into your wealth plan? Work with your financial advisor to establish an effective strategy.