FAQs: Is It Better to Give My Children Their Inheritance Now – Or After I Die?

  • Estate Planning
FAQs: Is It Better to Give My Children Their Inheritance Now - Or After I Die? | Mario Godoy | Lombard Estate Planning Lawyer

Many parents carefully save their money so they can leave an inheritance for their children. They make financial and estate planning decisions based on their goal to protect their children’s future after they die. Passing down wealth to your children and grandchildren is a generous goal. But many parents are also asking, Is it better to give me children their inheritance when I die – or now? There are personal and financial reasons to consider gifting your child their inheritance now, rather than when you die.

3 Reasons to Gift Your Children Their Inheritance Today

1. Sharing Their Joy 
Many parents are choosing to gift their children their inheritance while they are alive so can watch and share their children’s enjoyment of the gift. They may have real-life family or professional needs that your gift can help them resolve. Perhaps they have a trip of a lifetime that they want to take, and that you would get enjoyment and satisfaction from seeing them take.

If your own retirement needs aren’t jeopardized, you may decide to share their joy by giving your children their inheritance today.

2. Changes to the Tax Code
Recent changes in the tax code make it easier to gift money to your heirs before you die. In 2020 the annual exclusion is $15,000 – which means you can gift anyone up to $15,000 per year without triggering gift taxes. That number could rise in the future as inflation impacts the value of the U.S. dollar.

3. Current Exemption Levels
On January 1, 2026, the federal gift, estate, and GST exemptions will be cut in half. You can take advantage of the increased federal exemptions by utilizing estate planning strategies such as gifting in advance of the sunset date.

• Federal gift, estate and GST exemptions are currently $11,400,000 for each individual, increasing to $11,580,000 in 2020.

• For married couples the exemptions are currently $22,800,000, increasing to $23,160,000 in 2020.

Carefully reviewing your assets and beneficiaries is an essential part of estate planning. Equally important is carefully reviewing the needs of your children, and your wishes for their future.

If you are planning your estate and have questions about gifting and gift taxes, an experienced estate planning lawyer can advise you throughout the process. To talk to a qualified attorney in Chicago or Lombard, contact the Estate & Probate Legal Group at (630) 800-0112