Your Young Adult Relatives Need A Modest Cash Infusion Now More Than They Need A Big Inheritance Later
Even if you are so old that you do not know the difference between Twitter, Snapchat, Instagram, and Tik Tok, certainly you have heard that young people are anxious and pessimistic about their finances. Yes, you can dismiss the aspirations of those teenagers who aspire to be social media influencers the way that you aspired to be a rock star when you were a teenager, but from the Great Resignation to quiet quitting, and from the rise of Buy Now Pay Later to rising prices of just about everything, the young generations are struggling financially. The last thing they want to hear is that they might inherit some money from you decades from now, when you die. These times are so uncertain that it is impossible to tell if the human race will still exist two generations from now, or if human beings will have any use for currency. From the perspective of an Orlando estate planning lawyer, the best thing you can do is to give the Millennial and Generation Z members of your family tax-free cash gifts of up to $15,000.
How the Annual Gift Tax Exclusion Works
Each year, the IRS sets the maximum amount of money that any individual can give to any recipient during that year without having to pay gift taxes. In 2022, the maximum tax-free amount is $15,000. You can give up to $15,000 to as many recipients as you want to give to or can afford to give. You can do this year after year, until the total amount of money you have given equals $11,000,000. Of course, by the time you reach $11 million in gifts, if you are among the small fraction of the one percent who can afford that much money in gifts, the lifetime limit will probably have increased.
It’s Not a Lot of Money to You, but It Is to Them
If you can afford to give $15,000 as a gift, or even $3,000, you probably have a son, daughter, niece, nephew, or grandchild who could really use the money. Consider that debt is a huge problem for young adults, from student loans to credit card debt to BNPL payments. Anything that your young adult relative buys with your gift is a purchase that he or she makes without borrowing. It isn’t as exciting to watch your daughter deposit a check in the bank, knowing that she will use it to pay down medical debt or to pay for your grandchildren’s daycare as it was to introduce her to the family’s new puppy on Christmas Day when she was a child, but it will do just as much to make the coming year a happy one and to promote family togetherness.
Contact Gierach and Gierach About Financial Decisions With and Without Sentimental Value
An estate planning lawyer can help you spend your money in pursuit of your own happiness and that of your family. Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.
Source:
theglobeandmail.com/investing/personal-finance/young-money/article-forget-the-inheritance-why-cash-gifts-in-early-adulthood-are-a-smart/
