As we approach the close of another year, many families begin asking the same questions: “How much should I give?” and “Where should those gifts go—to family, church, or charity?” These are meaningful questions that go far beyond tax efficiency. They touch the heart of what legacy truly means—passing on not just wealth, but wisdom and values.
1. The Strategic Side of Generosity
From a financial standpoint, year-end gifting offers a unique opportunity to align your generosity with smart planning. The 2025 gift tax exclusion allows individuals to give up to $19,000 per recipient (or $38,000 per couple) without tapping into lifetime exemption amounts. For families looking to reduce future estate tax exposure, this can be a simple yet powerful tool—especially when gifts are made consistently over time.
For larger gifts, the lifetime estate and gift tax exemption currently passed into law at $13.99 million per individual (double that for married couples).
2. Family Gifting: More Than a Financial Transaction
When gifting to family, remember that you’re not just transferring assets—you’re transferring trust and responsibility. Consider pairing financial gifts with educational conversations or experiences that help the next generation understand stewardship, investment principles, and philanthropy. For example:
• Contribute to a grandchild’s 529 education plan.
• Gift shares of a family investment portfolio and involve them in review discussions.
• Use a donor-advised fund (DAF) to let children help choose charitable beneficiaries.
These acts reinforce values that last far longer than the dollars themselves.
3. Giving Back: Faith, Philanthropy, and Community
Many clients also feel a deep desire to give back—to their church, alma mater, or community causes. Charitable giving remains a cornerstone of legacy planning, not only for its impact but also for its tax efficiency. Strategies to consider:
• Appreciated stock gifts can help you avoid capital gains tax while supporting organizations you care about.
• Qualified charitable distributions (QCDs) from an IRA (for those 70½ and older) can satisfy required minimum distributions while reducing taxable income.
• Donor-advised funds provide flexibility—fund your account this year, take the deduction now, and decide on recipients later.
For those whose faith guides their giving, this is also a time to reflect on stewardship. Giving to your church or faith-based organization not only strengthens your community but aligns your wealth with your values—an essential part of any legacy plan.
4. The “How Much Should I Give?” Question
There’s no single formula for generosity. The best approach balances intent, capacity, and timing. Ask yourself:
• What do I want my wealth to accomplish—for my family, my community, and my beliefs?
• How can I give meaningfully today without compromising long-term financial security?
• Do my giving strategies align with my estate plan, trust structures, and tax position?
Working with your advisory team—financial, legal, and tax—ensures that your generosity is both heartfelt and strategic.
5. The Legacy Beyond the Ledger
Ultimately, legacy planning isn’t about numbers on a balance sheet—it’s about values, stories, and impact. Whether you’re funding scholarships, supporting ministries, or empowering the next generation, your giving reflects who you are and what you believe in.
As you review your year-end strategy, take time to pause and reflect. This season is about gratitude—an opportunity to give generously, plan wisely, and build a legacy that outlives you.