{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"Is It Wise to Gift My Children Money While I\u2019m Alive? Ep#294","description":"If you have children and you\u2019ve been thinking, \u201cWhy wait until I\u2019m gone to help them financially?\u201d\u2014this episode is for you. In Episode 294, I walk through the biggest things to consider before making gifts to your kids while you\u2019re still alive, and I break down some of the smartest ways to do it without triggering unnecessary taxes. I\u2019m seeing this trend more and more with my clients, and it makes sense. Financial markets have performed well, real estate has surged, and many retirees are in a stronger position than generations before them. But just because you can gift money doesn\u2019t mean you automatically should. There are several financial and family dynamics you need to think through first. The First Question I Ask: Can You Truly Afford It? Before you gift a dime to your children, I want you to look at your own financial foundation. I work with clients in their late 50s all the way into their 80s, and one of the most important realities is this: your retirement plan has to work first. You may have raised your kids, supported them, paid for education, and helped them get launched. Ideally, they should be able to support themselves. If you\u2019re gifting because you\u2019re financially secure and you want to, that\u2019s completely fine. But if the gift creates risk for your long-term success, it\u2019s not worth it. I also want you to think about long-term care. Many people don\u2019t have long-term care insurance because it\u2019s expensive, or they had it and dropped it when premiums increased. That means they\u2019re planning to self-insure. If you give away too many assets now, what does that do to your ability to fund care later?   You\u2019ll Want to Hear This Episode If You\u2019re Interested In\u2026 [02:12] The #1 financial checkpoint before gifting anything [03:18] Long-term care planning, and why gifting can backfire [04:02] Common gifting goals: housing, school, debt, lifestyle support [05:12] Why business funding gifts require extra caution [06:26] The \u201cfairness problem\u201d when you have more than one child [07:22] How gifts can unintentionally destroy motivation and independence [08:10] The 2026 gift tax limits ($19,000 per person, $38,000 per couple) [09:04] The lifetime exemption, and why Congress can change the rules [10:28] The hidden danger of gifting appreciated assets [11:07] Step-up in basis vs. gifting while alive [12:05] Medicare premium impacts and capital gains planning [13:14] The tax-efficient order of assets to gift [15:22] Gifting real estate, and the cost basis trap [17:12] The 2-out-of-5-year home sale exclusion rule [18:05] The five-year Medicaid lookback and trust planning considerations   What\u2019s the Gift Actually For\u2014and Is It One-Time or Ongoing? One of the most important planning steps is clarifying why you\u2019re giving the money. The most common reason I see right now is housing. Real estate prices have climbed dramatically, and higher interest rates make monthly payments tougher. Helping a child with a down payment can make homeownership realistic. Other common reasons include paying for schooling, helping pay off student loans or credit card debt, or supporting a child during illness or unemployment. Some parents also want to help grandchildren with camps, daycare, or private school. I also talk about gifting money for a business startup\u2014but this is where I urge caution. Businesses fail all the time. If you\u2019re going to do it, I believe a business plan and a real strategy matter. Taxes, Cost Basis, and the Biggest Mistake People Make Many people assume gifting is simple. It isn\u2019t. In 2026, you can gift $19,000 per person per year without triggering reporting. Married couples can gift $38,000 per child annually. Above that, you may need to file a gift tax return, and the excess counts toward your lifetime exemption. Right now, that lifetime exemption is around $15 million, but I\u2019ve been a financial advisor since 2001 and I\u2019ve seen it change dramatically. When I started, it was only $600,000. Congress can change the rules again. And here\u2019s the big one: if you gift appreciated assets while alive, your child inherits your cost basis. If they sell, they may owe a large capital gains tax. But if they inherit through death, they get a step-up in basis. That one detail can mean tens of thousands of dollars in taxes.   Resources Mentioned RetireWithRyan.com Retirement Readiness on Demand Discount Code: RETIRE99 Connect With Ryan Subscribe to the Retire With Ryan YouTube Channel Download my entire book for FREE ","author_name":"Retire With Ryan","author_url":"http:\/\/retirewithryan.libsyn.com\/website","html":"