One question we hear fairly often from clients is: “Should I give money to my kids while I'm alive, or should I wait and leave it to them as an inheritance?”
Like many financial planning questions, the answer is: it depends. But I think there are several important things to consider.
First, when would the money have the greatest impact?
If you live into your 90s, your children may be in their 60s when they receive their inheritance. By then, they may have already paid for college, raised their children, bought a home and accumulated significant retirement savings.
Compare that with receiving some help in their 30s or 40s. Maybe it provides a down payment on a first home, helps them start a business, pays for education or gives their young family a little breathing room.
Now could certainly have a greater impact and you get to enjoy seeing it.
Another thing to think about is would the money ultimately help or hurt them?
I like to think of this as giving your children a boost or a leg up, not carrying them through life.
That's an important distinction. We want our gifts to help our children become more financially independent, not less. If they begin to depend on Mom and Dad to fund their lifestyle or bail them out whenever they make a poor financial decision, our generosity may actually be doing more harm than good.
That's also why it can make sense to start small.
Giving smaller amounts while you're alive gives you an opportunity to see how your children handle money. Do they save some of it? Do they use it thoughtfully? Are they generous? Do they make wise decisions?
That can help you determine whether they're ready to handle larger gifts—or eventually a larger inheritance. It can also create opportunities to have conversations about money, stewardship and the responsibility that comes with wealth.
Also, consider the tax consequences.
In 2026, you can give $19,000 per person per year without using any of your lifetime gift and estate tax exemption. A married couple could potentially give $38,000 to each child—and another $38,000 to that child's spouse.
You can generally give considerably more than that without actually owing gift tax, although larger gifts may require filing a gift-tax return.
And be thoughtful about what you give. If you gift an appreciated investment during your lifetime, your child generally receives your cost basis. If they inherit that investment after your death, however, it generally receives a step-up in basis, potentially eliminating a significant capital-gains tax liability.
So it may make sense to give cash or other assets during your lifetime while holding highly appreciated investments for your estate.
For many families, then, the answer isn't either “give now” or “give later.” It may be a thoughtful combination of both.
Make sure your own financial future is secure. Start with amounts your children can learn to manage responsibly. Give enough to provide opportunities without creating dependency. And be thoughtful about which assets you give during your lifetime versus leave through your estate.
A well-timed gift can give your children a meaningful boost without removing the satisfaction and responsibility that comes from building a life of their own.