When transferring wealth to family members earlier, it can have a
more significant impact in the recipient’s life – to help pay for
education, a home, build a business, or reach other milestones. The
same holds true when making donations to causes or charities, you can
see the direct impact of your gift to the work being done.
Giving while living is not just for the very rich. It can be done
through several ways: monthly or annual gift, paying off debt or
student loans, and other options to ensure a gift will have a
significant and positive impact.
Step 1) The first step is to have conversations, with your
family and with your financial advisor, and put in place a plan with
all the required documents to allow you to pursue your gifting goals.
These can be short, medium, and long-term goals and identify your plan
for the remainder of your own life and for the recipients of your
gifts – from family to charities or causes.
Step 2) Following this discussion, you want to ensure that you
have all the paperwork and directives in place to carry out your
wishes. This includes writing or updating wills, personal directives,
and other important financial and personal documents.
Step 3) To ensure you can meet your personal living and
philanthropic goals, you may be required to add to or revise your
investment and asset allocations as well as make adjustments to other
financial tools, like life insurance. This, along with documentation
mentioned in Step 2, becomes your estate plan.
Step 4) You may need to do some research on charities or causes
you wish to support, to determine the optimum way to gift such as
cash, insurance, or investments. You will want to have discussions
with your family and financial advisor to ensure that the recipients
know and understand how to make the most of the gift.
Step 5) There may also be costs that need to be managed by the
beneficiaries, so these early discussions will help to identify and
plan for their payment – especially when transferring assets like
family property or business assets.
These are the initial steps you can take as you think about your
giving plan. In subsequent blog posts, I will talk about some of the
key areas of gifting.
Your financial advisor can provide you with more details and
information that will help you develop your personal estate plan that
will help you make the decisions that are right for you.