Making your list for monetarily gifting family members can really get you into the Christmas spirit. Many parents and grandparents take a festive, although serious, approach to gifts they give to family. Sure, when the grand baby arrives, who can resist that tiny team jersey or pink headband. But you want to do more. Life, love, happiness and security. That’s what you want to help provide.
If you’re serious about financially gifting family members, take it seriously.
Most of my clients aren’t wealthy, not in the sense of having made it to the list of Wealthiest People from Somewhere. However, a lot of my clients are well-positioned financially and take advantage of tax laws and opportunities that allow them to give monetary gifts to family members. Their stories create this composite list-to-gift experience.
I looked at my weekly calendar and smiled. I could almost hear the music:
“We’re making a list and checking it twice…”
Carolyn and Hal had a plan and a gift list and were ready for me to check it.
Carolyn and Hal’s second grandchild is six weeks old old, her brother, three. Their only child, Megan, would go back to work next month and their son-in-law had taken two weeks vacation time to be home. All was well, hectic, of course, and with Carolyn and Hal living close, they were readily available as needed and always ready for visits.
When it comes to gifting family members as they had been doing for the past several years, there are serious IRS considerations. When Hal and Carolyn handed me their list, we started at the top to keep their plan in motion:
- For 2017 they wanted to make sure they fulfilled the $14,000 annual gift exclusion amount that each of them could give both grandchildren, their daughter and husband, Jason.
- Megan was having her teeth capped. They wanted to take advantage of “gifting” the cost by paying the dentist direct so this amount wouldn’t be counted towards the gift exclusion total.
- They had already started a college fund for their grandson. For the baby they wanted to discuss a 529 account front loaded with $140,000 as an option to the annual gift exclusion amount for five years.
- They were also concerned how this 529 could effect Megan and Jason’s taxes.
- Carolyn and Hal had reviewed their will and estate planning the previous year, but felt with the new grandchild, they should set an appointment with their lawyer and me so we could all discuss any possible updates.
- As we have also done in the past, we called their daughter and she and I scheduled an appointment for her and Jason to review their tax planning and strategies based on her parent’s gifting to them.
- Then we looked at the cutest grandchildren pictures!
Gifting Family Members all wrapped up with ribbon!
Hal and Carolyn have been clients for many years. There are a lot of things I like about them including the fact that they don’t tell their daughter and son-in-law what to do with the financial gifts they give them. They raised their daughter well and taught her responsibility. She and Jason are also my clients and I’m so proud of them and the decisions they make.
There are other tax gifting choices that can benefit both the giver and the recipient. These tax strategy choices are good topics for tax planning sessions. Have you taken advantage of these opportunities? Let’s get together and talk about some of your options.
We establish and maintain a personal relationship with our clients and many times with their extended family, friends and referrals. We take care of the Business of Your LIFE. Schedule an appointment, let’s talk about your LIFE.
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