It’s my favorite time of year. As the sun goes down, the lights go on all around town. My drive home is filled with Christmas lights, lighted reindeer and my new favorite, the inflatable Christmas palaces all around me. Whether, it is the entrance to Whoville or Santa Flying in a helicopter or some playful pups around a Christmas Tree, I love seeing the decorations. I also love the chill in the air in the mornings. One of the things I love most is gift giving. As a child, I used to hear people say, “It is better to give than to receive.” I always thought those people were crazy and wouldn’t feel quite the same way if they received a new Sega Genesis and five new games. (That was a fun year.) Then, I met my wife. I learned that the most fun I ever had was giving to her. Then, we began volunteering together and buying presents for needy families and toy drives and we saw how much fun that was. Then, we had children, and we learned how much fun it is to shop for them and the joy you feel when you find that perfect gift. For our son Jack, as an almost 3-year-old, it was Rescue Bots Transformer toys. That kid played with those things for hours on end and still does nearly 18 months later.
As an adult, I have made my career as an Estate Planning Attorney. One of my favorite things about this area of practice is that I get to help people make the right gifts that truly benefit their family sometimes for generations. I once heard a statistic that inheritances and lottery winnings last about the same amount of time: Most have spent the entirety in 18 months. As the saying goes, easy come, easy go. For me, that’s not good enough. I want to help my clients find ways to plan for their children and grandchildren that make lasting gifts and can provide structure and benefits for years to come. Here are some things to consider as we near the end of the year and gift giving season goes in full swing:
- Consider gifting into a college fund for your grandkids. Your three-year-old grandson may not appreciate it today, but in the future when he is getting an education that was already paid for he just might. Another option is leaving money in a trust to take care of education and health care needs for a group of people. One of my clients has a pool of money that he inherited from his parents. He has always used that money to make gifts to his children and grandchildren as they needed it for different healthcare reasons and/or educational costs. He wants the same to be done with that money even after he is gone, so we are structuring a trust to do just that.
- If you have been putting off getting a will done, do it this year. Make it a gift to your family members. Even your adult children might not understand the significance of this gift at first, but it is an amazing gift to provide structure in a time of grieving. Unfortunately, just this morning I had two clients come to me after their family members passed away without a will. Both were situations that would have been very straightforward had there been a will: modest estates, not much more than a house in either one. However, the situation will not be simple or easy for either of them and in fact will likely take more than eighteen months to settle. The gift of an estate plan provides so much peace and clarity in these situations.
- Do you have a favorite charity? Are you tired of paying so much in income tax every year? Make an end of the year gift to your favorite charity to use as a write off reducing your taxable income this year. Maybe consider making a gift to an endowment fund so that the gift continues to be given year after year.
- If you have an estate that may go over the $5.49 million mark in your lifetime, you may want to consider making some annual gifts to your children and grandchildren. As long as your gift stays below $14,000.00 per year, the gift remains tax-free and does not have to be reported on a gift-tax return. If you are married, you can each gift $14,000.00 per year for a total of $28,000.00. If you are gifting to a child who is married, you can double that again by making the same gift to his or her spouse.
There is nothing more satisfying than giving a gift that can make a real impact on someone’s life or continue on for many years. Let this season be your best gifting season ever!