A common objective within families is sharing wealth with family members and loved ones. Sometimes it’s a desire to do so, carefully planned and executed. Sometimes, it’s an unexpected need.

Whatever the circumstances, there are many ways to maximize your giving potential. Jennifer Myers of SageVest Wealth Management presented a recent session at McLean Community Center on how to balance family priorities and values, tax strategies, estate provisions, and other considerations, to help create financial security for you and subsequent generations, both now and in the future. 

A range of influencing factors can impact the gifting process and outcome, as well as your own financial and life objectives. These include:

Appropriate gift amounts

Parents naturally want their children and grandchildren to enjoy fulfilling futures, and gifts can often help these visions become reality. However, wise gifting strategies need to be well thought out, considering:

  • How will a gift be used, and how does that relate to family priorities and values?
  • Is the gift intended to meet a one-time need, or might the need be recurring?
  • Might the recipient forego a life learning moment if you make a gift? If so, should the amount be staged or coupled with loans to foster financial learning and personal growth?
  • How does the gift impact your own short-term and longer term financial security?
  • If a gift isn’t appropriate, is there another way that you can help?

College Funding

College funding is one of the most common family objectives. It’s also one of the biggest family challenges. Helping those you care about with college funding is a great way to ensure that your gifts will be used for a purpose you support, while alleviating financial burdens from loved ones. There are many things to consider when making educationally focused gifts, including:

  • What are the primary differences between education specific accounts, including 529 college savings plans and Coverdell IRAs?
  • How do education-specific accounts differ from traditional custodial and trust accounts?
  • What tax and funding limits do you need to be aware of?
  • What flexibility is retained in terms of control or outcomes, should a child receive a scholarship or not attend college?

Methods of Gifting

There are many ways to bestow a gift other than simply writing a check. Alternative methods can refine gift use objectives, offer enhanced tax benefits, strengthen asset protection, and allow some retained control. A few traditional alternative forms include:

  • Gifts held in trust
  • Generation skipping trusts
  • College savings plans
  • Shares of property or business interests that might afford gift discounts
  • Leveraged gifts such as life insurance funding
  • Charitable gifts that provide income or foster family participation

It’s important to ensure that all your financial decisions work in support of one another and your life goals, including gifting to loved ones. We encourage you to contact us to learn more about answers to these questions and wider financial planning for the benefit of you and your family.

On November 19th, SageVest Wealth Management was selected to host a Fall presentation at McLean Community Center on the topic of ‘Gifting To Children And Grandchildren’. SageVest President, Jennifer Myers, was joined by Lewis Saret, Esquire. Both Jennifer and Lew are repeat recipients of Washingtonian Magazine’s Top Professionals recognition, in the fields of Top Fee-Only Advisor, and Top Trust and Estate Lawyer respectively.

Prepared by SageVest Wealth Management. Copyright 2015.

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