Sharing with loved ones is the theme of the season. Giving to children and grandchildren is an important financial priority that surfaces around the holidays. “We want the next generation to have a more financially secure and more rewarding life than we have had.” explains Jack Clark, Registered Principal at Clark & Goshow Financial Strategies Group. But he adds, “It’s also important to make sure that your generosity doesn’t jeopardize your own financial security”. With open communication and an awareness of tax implications, you may be able to provide the help you want to give, in a way that works best for you and the recipient. First, you should assess your situation. It’s critical for individuals to prioritize their own financial security before making gifts to family members. Nobody wants to become a burden to their family, which can happen if you give away the assets you’ve acquired to support yourself.
Secondly, communication about money is critical within families. Once you’ve established for yourself the limits on your ability to give, share with your family members the help you’d like to offer, and invite them in turn to talk with you about their needs. Also, is what you’re being asked to support in line with your priorities? If you greatly value education, you may want to offer to pay tuition directly to a school rather than giving a lump sum of cash.
Last, but not least, consider the tax implications. It’s important to make sure any gifts you make don’t trigger an unexpected tax bill. Non-cash gifts such as securities or real estate could also be given instead of cash. Medical expenses and tuition bills paid directly to the institution or service provider are tax-free, and don’t count toward your annual or gift tax exclusions. Don’t forget that your gifts don’t need to be monetary. You may discover through conversations with family that offering your time is really what’s needed.
At Clark & Goshow Financial Strategies Group, we’ll take the time to get to know you. We’ll look at your complete financial picture and create a plan that provides you with confidence in your financial future. Our Envision process helps identify where you are, where you want to go and how you plan to get there. Contact us to begin planning for your future today.
Clark & Goshow Financial Strategies Group, LLC 707 Eagleview Blvd, Suite 104 Eagleview Corporate Center | Exton PA ClarkGoshow.wfadv.com