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Securing Your Legacy: A Comprehensive Guide to Wealth Transfer

Updated: Dec 12, 2023



By Anastasia Taber


Making plans for transferring your wealth can seem like an overwhelming and complex undertaking. Family dynamics, complicated estate laws, accurate asset valuation, and tax considerations are just a few of the challenging aspects of wealth transfer planning


Still, it doesn’t need to be a joyless task. Wealth transfer helps stabilize your legacy, providing confidence that your family and causes will benefit from your generosity across future generations. In the financial planning context, legacy involves the assets and wealth to be transferred to the next generation.


Let’s explore our key insights on your economic legacy and how to strategize gifting.


Direct Payments

Making direct payments to children, grandchildren, and other family members can help provide a financial safety net. Thanks to your donation, future generations can pay for college tuition, medical expenses, homes, investments, business ventures, and emergency funds.


Additionally, making direct payments to charitable causes you care deeply about is another way to establish your legacy. Direct contributions make estate planning and wealth transfer a little easier by reducing your taxable assets and circumventing gift tax. They’re impactful ways to assist those charities and support causes closest to your heart.


Annual and Lifetime Gifting Exclusions

Currently, individuals are allowed to donate up to $17,000 in annual gifts without incurring taxes. For married couples, the excludable amount is $34,000. Gifts with value that fall below those amounts do not have to be reported to the IRS.


If your wealth transfers surpass the annual gift exclusion, you’ll have to file a federal gift tax return next year. But the excess amount counts toward your lifetime gift tax exclusion, which means you may not ultimately have to pay a gift tax for the donation. As of 2023, the lifetime exclusion limit is $12.92 million; in 2024, it will increase to $13.61 million.


529 College Savings Plans

One tax-efficient way to help college students in your life is to set up a 529 savings account. This helps students pay for tuition, books, loan repayment, and other college expenses without incurring taxes.


You can make up to $85,000 in contributions—or $170,000 for married couples—in one year without having it count against your lifetime exclusion limit. The amount is deducted from your estate. When your beneficiaries withdraw it for qualifying education needs, the withdrawals could be free of federal or state taxes.


If you’re in a position to make more substantial gifts, you can take advantage of a rule that allows you to make a lump-sum gift of up to five times your annual gift tax exclusion and distribute it over five years.


Irrevocable Trusts

As you might guess, an irrevocable trust is a fund into which you can transfer your wealth, but cannot change or take back in the future. The biggest advantages of an irrevocable trust are that the assets it holds are shielded from legal claims and creditors, and they are deducted from your taxable estate.


An irrevocable trust must be carefully planned because of its lack of flexibility. You’ll be handing over control of the trust to someone else, so you’ll have to be comfortable with that arrangement.


Gifts of Experience

Instead of concentrating on financial affairs, you might want to spend your money on curating experiences with family and friends. This could mean purchasing a summer home or taking the family on a trip. After all, those memories—not your wallet—are what your family will remember most about your time together.


Professional Guidance on Wealth Transfer

If you’re planning for wealth transfer, you’ll want the surest hands available to help you make arrangements and avoid excessive taxation. Find a professional advisor who aligns your finances with your ambitions and ideas for your legacy.


The right wealth advisor gives advice that’s solely focused on your goals and those closest to you. With those matters in hand, you can continue to lead a happy, fulfilling life, knowing your family will be in good hands long after you’re gone.


Call TABER for Fiduciary Wealth Planning

We at TABER Asset Management adhere to the fiduciary standard, which means we only recommend financial products that are in the client’s (and their family’s) best interests. If you’d like to partner with a professional that always puts you first, get started today by scheduling a 15-minute intro phone call online or reaching out to us at 515-557-1860 or invest@taberasset.com


About Anastasia

Anastasia Taber is an Associate Advisor and leads the financial planning services division at TABER Asset Management, an independent, fiduciary wealth management firm that strives to do one thing well: manage their clients’ money by creating wealth, building wealth, growing income, and preserving capital so they can experience financial freedom. Anastasia has a Bachelor of Arts in English with a minor in Chinese from Georgetown University, is a candidate for CFP® certification, and has years of experience working for one of the largest REITS in the U.S., as well as in property management and accounting at a global law firm in Washington D.C. Anastasia is passionate about exceeding her clients’ expectations and building caring, long-term relationships based on trust. She is known for being detail-oriented and committed to excellence in her work. Anastasia is a co-host on the Creating Wealth podcast. To learn more about Anastasia, connect with her on LinkedIn.


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