3 Reasons to Consider a Wealth Transfer Now

I have younger heirs to whom I'd like to pass on some of my wealth. I had planned to make those bequests in my will, but are there advantages to gifting assets while I'm still alive?

A recent Schwab survey found that 56% of high-net-worth baby boomers plan to distribute some of their wealth during their lifetimes—yet they still intend to pass on most of their assets after death.

Although you should prioritize your own needs, here are three reasons it might make sense to give sooner rather than later—along with other factors that could inform your decision.

1. You want to witness the impact of your gifts: Many people work hard to build a financial legacy for the next generation—but far fewer get to see that legacy in action. Sharing your wealth right now means you can experience its impact. What's more, you can offer your beneficiaries guidance and wisdom alongside your gift.
2. You want to help heirs find their financial footing: With the rise in housing prices, it's become harder for younger generations to purchase a first home. The cost of college has also risen sharply, saddling many new grads with student debt. Supporting heirs when they need it most can make all the difference to their future prospects. This is especially true given today's longer lifespans. If you wait until you're gone to pass wealth to your heirs, they might be well past middle age or even in retirement themselves!
3. You're worried about estate taxes: In 2025, the federal gift and estate tax exemption is $13.99 million for individuals and $27.98 million for married couples—and 12 states plus the District of Columbia levy their own estate taxes. Gifting during your lifetime lets you shift assets and any future appreciation out of your estate, reducing its size and potentially lessening or even eliminating future estate taxes.

Before you start giving, it's important to take stock of your financial picture and decide how to structure your gifts:

Your priority is to ensure you don't give away assets you'll potentially need later in life. That means reviewing your current expenses and goals, as well as considering worst-case scenarios. Have you budgeted for the possibility of long-term care? What if the market declines for multiple years in a row right when you most need money out of the market?

A financial advisor can assist in projecting your potential wealth surplus at the end of your life, which can help inform how much you can afford to give now. You can also take a more cautious approach by starting with smaller gifts and increasing them over time as your comfort level and financial situation allow.

You can give up to $19,000 per recipient ($38,000 if you're a married couple) to an unlimited number of people in 2025 without eating into your gift and estate tax exemption. Plus, payments made directly to educational institutions for tuition costs or to health care providers for qualified medical expenses don't count against the exemption, giving you more tax-free avenues for gifting.

Keep in mind that if you give noncash assets during your lifetime, the recipient will be subject to the same cost basis as you and therefore potentially face a significant tax bill on the appreciated amount when they sell those assets. Work with your estate-planning attorney to help maximize the tax-efficiency of your gifts—for you and for heirs.

If you're concerned about giving younger relatives funds they may not be ready to handle, one potential solution could be a spendthrift trust, which allows you to put guardrails around how and when beneficiaries may use the funds. An estate-planning attorney can advise you on a strategy tailored to your goals and family dynamics.

Be clear about your plans—and how those plans may change if, say, the market declines sharply and you feel uneasy about making a planned gift. Just because you start gifting doesn't mean you're under any obligation to continue, but you should be as up front as possible about how your own needs must take precedence.