The article discusses the pros and cons of giving large sums of money to children, citing a Redditor's experience of considering giving $250k each to their young adult children, both of whom are on promising career paths. While direct, large gifts can simplify financial goals, they may also pose risks. Instead, it's suggested that parents consider the IRS gift limit, which allows for annual gifts of $38k per couple, ensuring consistent support without the tax complications that come with lump sums. Additionally, parents should retain high-value stocks to pass them on to their heirs without capital gains taxes.
Gifting money to children can lead to financial success, but large sums should be approached carefully due to potential risks and financial implications.
One recommended strategy is to gift within the IRS limit, currently $19k annually per child, allowing for gradual, tax-free financial support.
Parents should consider keeping high-value stocks until death to ensure children inherit them without capital gains taxes, maximizing their investment.
Instead of offering lump sums, a consistent gift strategy can provide children with support while encouraging them to achieve their own financial goals.
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