Why More Families Are Choosing to Gift Wealth Earlier—and How to Do It

Estate management isn’t just about what happens after you’re gone— it’s also about what you can do now to help manage future estate taxes, transfer wealth strategically, and attempt to create a meaningful impact during your lifetime.

Many families recognize that intentional lifetime gifting isn’t simply generous; it may also be a smart approach to transferring your assets. If you’re in a position to support your own retirement needs, lifetime gifting can be a way to manage future taxes while helping your loved ones during your lifetime, when support may be most useful. And unlike traditional inheritance, you’re able to experience the impact of your generosity.

After working with clients on their gifting and estate strategies over the years, we’ve pulled together some insights we hope you find helpful.

The “Great Wealth Transfer”

The topic of gifting assets is timely because America is undergoing the greatest wealth transfer in history.

According to Cerulli Associates, a wealth management research firm, $124 trillion of wealth will transfer among generations through 2048.1

Cerulli projects that of the total, $105 trillion is expected to flow to heirs and $18 trillion to charities. The bulk (81%) will be transferred primarily from Baby Boomers (born between 1946 and 1964).1

Millennials (born between 1981 and 1996) will be inheriting the most of any generation over the next 25 years ($46 trillion). However, Gen X (born between 1965 and 1980) will inherit the greatest portion of assets in the next 10 years, totalling $14 trillion.1

So, determining how to transfer these assets may be a discussion you want to start having now.

Shift in Gifting Philosophy

Legacy gifting after death has long been the most popular way households have distributed their wealth. Today, however, a growing number are opting for lifetime or intentional gifting — passing along money in a deliberate way while still alive.2

The rise in intentional gifting may be attributed to several factors, including a desire to help family during one's lifetime, a greater understanding of taxation and lifetime gifting limits, and the prevalence of gifting choices.2

Benefits of Lifetime Giving

There are pros and cons to gifting assets during your lifetime. Here are some of the tradeoffs we’ve seen when working with our clients:

• Manage the size of your taxable estate

A potential benefit of financial gifting during your lifetime is managing the size of your taxable estate. However, it also removes the money from your control and transfers it to others, which can be a concern for some.

For 2025, the IRS allows individuals to gift up to $19,000 ($38,000 for married couples) per year without being a taxable event for the recipient. There is no limit on the number of individuals you can gift. For example, a married couple with two children and five grandchildren can transfer up to $266,000 annually.2,3

In addition, for those with sizable assets, the IRS allows individuals to gift up to $13.99 million ($27.98 million for married couples) to their heirs under the lifetime gift and federal estate tax exclusion. 2,3

Managing the size of your estate may help limit your exposure to federal and (some) state estate or inheritance taxes. Although some states, such as Florida and Texas, impose no estate or inheritance tax, others, like Massachusetts, Oregon, and New York, levy their own estate taxes. For some families, state-level taxes can take a bite out of the inheritance left to loved ones.

By managing your estate, you may be able to preserve more of your hard-earned wealth for your family while keeping an eye on taxes at both the federal and state levels.