Lifetime Gifting: Give While You’re Here to See the Difference

November 6, 2026

Wealth is built over time, through decisions, relationships and opportunity. For many families, passing it on is about more than what heirs may receive in the future. It can also mean helping a child or grandchild buy a home, pursue an education, start a business or take an important next step while you’re here to share in the moment. 

A lifetime gift can bring that support forward. It can also give families a chance to talk about the intentions behind their wealth and the values they hope to pass along with it. The decision deserves care: a gift should support the next generation while preserving your own financial security and fitting into your family’s broader plans. 

The opportunity to plan ahead is growing. Cerulli Associates projects that U.S. households will transfer $123.7 trillion through 2048, including $105 trillion to heirs and $18 trillion to charities. 

Families already provide financial support during their lifetimes. In a 2025 Understanding America Study module summarized by the Federal Reserve Bank of Richmond, about 13% of respondents reported giving financial transfers to adult children. Among those giving to adult children, the median transfer was $3,000. The study reflects a broad population, rather than high-net-worth families specifically, but it illustrates how often families help one another before an inheritance. 

Start with What You Want the Gift to Make Possible 

A useful first step is to talk through your goals. Are you hoping to help with a particular milestone, provide steady support over time, or give a family member more freedom to pursue an opportunity? The answer can shape the amount, timing and form of the gift. 

It’s just as important to consider what you may need in the years ahead. Look at your income, spending, health and care costs, housing plans, investment outlook and the possibility of a long retirement. A gift can be difficult to reverse, especially when it involves cash, investments or property you may later need. 

Some families begin with a smaller or staged gift. This can provide meaningful support while leaving room to understand how the arrangement works for both giver and recipient. The aim is to help the next generation while keeping your own financial plan on solid footing. 

Consider the Ways You Can Give 

Make Annual Gifts  

For 2026, the federal gift-tax annual exclusion is $19,000 per recipient. A married couple may generally give a combined $38,000 per recipient if each spouse makes a qualifying gift or they properly elect gift-splitting. The annual exclusion can be useful for ongoing support, though the details matter. Gifts of future interests, for example, do not qualify. 

A gift above the annual exclusion does not automatically mean gift tax is owed. It may require a federal gift-tax return and use part of the donor’s lifetime gift and estate-tax exclusion. For 2026, the IRS lists a $15 million basic exclusion amount per individual. These are federal figures. State law, prior gifts, ownership and other details can affect the analysis, so consult a tax professional about reporting and the effect on your remaining exclusion. 

Pay Certain Expenses Directly 

Eligible tuition and medical expenses paid directly to a school or medical provider may qualify for a separate gift-tax exclusion. The payment generally must go to the institution or provider, rather than to a family member for reimbursement. This can be one way to support a specific need while preserving annual-exclusion gifts for other purposes. 

Contribute to an Education Account 

A contribution to a 529 education savings plan can help a child or grandchild prepare for future education costs. Federal gift-tax rules allow a donor to elect to spread a contribution across five years of annual exclusions, subject to the rules and required reporting. This election can allow a larger contribution up front, but affects how much the donor can give that beneficiary during the five-year period. Review the plan, state tax treatment and beneficiary’s needs with your advisers before contributing. 

Consider Assets Beyond Cash 

Some families consider gifting investments or other property. The tax result can depend on the asset, its value and cost basis, how long it has been held and what the recipient plans to do with it. A recipient generally takes the donor’s basis in gifted property, while inherited property generally receives a basis tied to its value at the decedent’s death. This difference can affect future capital-gains taxes, so compare a lifetime gift with leaving the asset to heirs. 

The IRS explains these rules in Publication 551, Basis of Assets and its guidance on inherited property. 

A trust may provide more direction about when and how a beneficiary receives assets. It can be useful when a recipient may benefit from structure or when a family has more complex goals. Trusts also bring legal, tax and administrative considerations. An attorney can help determine whether a trust is appropriate and draft terms that reflect the family’s intentions. 

Make Room for Family Conversations 

A lifetime gift can support someone financially and help pass along the experience behind your wealth. When appropriate, talk with family members about what you hope the gift will make possible. Clarify whether it is a gift or a loan, whether it is intended for a particular purpose and how you’re thinking about support for other family members. 

 There is no single formula for what is fair across every family. A thoughtful conversation can make expectations clearer and give the recipient a chance to ask questions. For larger or ongoing gifts, it may also be an opportunity to share the values, stewardship and family history you hope will continue with the wealth. 

Bring Your Advisors into the Conversation 

Lifetime gifting is one part of a broader plan to preserve wealth and pass it on. Before making a significant transfer, consider the asset, the recipient’s circumstances, any reporting requirements, your estate documents and the effect on your own cash flow. 

A First Western Trust advisor can help you consider how a gift fits within your broader wealth plan and bring your tax and legal professionals into the conversation. With the right planning, a gift can support someone you care about today while reflecting the future you hope to build for your family. 

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