Friday, June 2, 2023

Giving your loot to your little treasures (Part 2)

Glen D. Smith

By Glen D. Smith, CFP®, CRPC®

We all want to provide for ourselves and our children, but once they’ve flown the coop, how can we keep-on giving?

In the previous article, I covered two important tips on sharing the love with your adult children. Below is a recap of the last post plus some additional advice for you to consider.

Cold hard cash

There’s a limit to our generosity, and folk often fall foul of the IRS, when they gift too much money to their children. At Glen D. Smith & Associates, I can help you give to your kids and not the taxman!

Is loaning the new gifting?

Parental loans are great because you dictate the duration of the loan. It’s important to be transparent, so ensure there’s a legal contract, fixed repayment schedule and details reflecting the loan terms.

Magically intangible

My kids, Lucas and Nathalia, love Mickey and Donald. If you have grandchildren, consider a Disney vacation for the whole family. It will cost upwards of $20,000 and you’ll be making forever memories, together.

But gift giving doesn’t stop when you have adult children. My wife and I will still want to share our love – possible more so – so intangible gifts will be a great way to spurge on our adult children. I’d love to take the family to Wimbledon but I’m sure my son Lucas would probably prefer Raptors tickets.

Avoid large purchases, instead buy smaller gifts that won’t interest the taxman. Be wary of bank-to-bank transfers and regular payments. Focus on occasional payments such as a credit-card balance or a visit to Whole Foods.

Last thoughts!

Your family will always be your number one priority. There are hundreds of ways to share your wealth without leaving yourself short of cash or incurring the wrath of the taxman.

But it takes time to organize your finances and can be very stressful so let our team and I take that weight off your shoulders. Together, we’ll personally analyze all your finances.

Glen D. Smith & Associates, Raymond James is located at 1029 Long Prairie Road, Suite C, Flower Mound, TX 75022. (469) 212-8072.

Glen D. Smith & Associates is not a registered broker/dealer and is independent of Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Any opinions are those of Glen D. Smith and not necessarily those of RJFS or Raymond James.

This case study is for illustrative purposes only. Individual cases will vary.  Prior to making any investment decision, you should consult with your financial advisor about your individual situation.

The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59½, may be subject to 10% federal tax penalty.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

CTG Staff
CTG Staff
The Cross Timbers Gazette News Department

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