Generosity Beyond Death: Reasons to Give Your Inheritance Before Death

Many of us believe that inheritance is exclusively for passing down assets after our passing. However, there are compelling reasons to give your inheritance to your heirs before you die, especially if you have more than enough to last you a lifetime. In this article, we explore why giving in advance can be beneficial for both you and your family.

Why Give Your Inheritance Before Death?

As a Google SEO expert, we understand the importance of estate planning and the significant impact of gifts given to heirs during one's lifetime. Unlike assets that receive a stepped-up basis in taxes, cash and personal property can be given directly to your heirs, providing immediate benefits and peace of mind.

For instance, when my parents each gave me $13,000 in 1985, it was a life-changing moment. One sibling used the funds to buy a truck with firewood, a side of beef, and a hot tub, while another was able to make a down payment on a house. Even if you aren't sure how your heirs will use the funds, the act of giving can provide them with the financial cushion they need in tough times.

Immediate Benefits and Personal Investment

Gifts received before death not only provide financial support but also foster a sense of personal investment and responsibility. For example, I began to gift money to my brother's children and grandchildren. I gifted my nephew about $8,000 to $10,000 per year when he attended college, assisted with paying off student loans, and helped my niece buy a condo with $16,000. Over the years, I have continued to support them with gifts for Christmas and other needs, all of which have been matched with saving for retirement through Roth IRAs and taxable investment accounts.

Building Independence and Financial Responsibility

By giving early, you can help your heirs build independence and financial responsibility. For instance, I have been giving two of my nephews $15,000 each year to purchase Roth IRAs and spousal Roth IRAs, as well as taxable investment accounts. This not only helps them start saving for retirement but also teaches them valuable lessons about investing and planning for the future. At their current ages, the $15,000 per year provides a substantial head start, and by the time they are in their 60s, they will have significantly more saved, thanks to compound interest and the time they have had to grow their investments.

Emotional Rewards and Legacy

The act of giving can also provide emotional rewards and leave a lasting legacy. For example, my brother received the family house, which he eventually sold. Despite not being able to purchase the house himself at that time, my brother received $25,000 off the purchase price, which he later used as a downpayment. This helped him feel valued and appreciated, and it also allowed him to see his sons, their spouses, and his grandchildren living in homes that he helped to make possible.

Conclusion

While some may disagree, giving your inheritance before death can provide many benefits. It ensures that your heirs receive the financial support they need, helps them build financial independence, and provides emotional rewards. As a Google SEO expert, I encourage those who are in the fortunate position to give early and often, providing a meaningful legacy for their loved ones.

Key Takeaways:

Gifts can be given to heirs to provide immediate financial support. Early gifts can help build financial responsibility and independence. The emotional rewards of giving can be substantial and long-lasting.