Tax-Smart Strategies for Wealth Transfer: Secure Your Family's Future

This exactly what my inlaws did every christmas. 5K for the married kids, 1K for the grandkids. We never could figure out where they got the money to gift out. They were a one income blue collar couple. After they died, the answer came out. That money was a small portion of their RMD'S.

A great gift to a young working person who qualifies for a ROTH IRA is to gift the amount of the contribution to that account - $7000 this year. A high school student who earns income is also likely eligible for a ROTH IRA but it will need to be set up as a custodial ROTH IRA until the person turns 21.

Two issues in our family - Our parents had already given some property to my siblings and were about to gift a property to me… we were in there process of transferring the title… until I realized the stepped up basis on this land our family has owned for a couple decades would be brutal to me if/when I sold it. And the gift tax would hurt my mother. Instead we added language to their trust to transfer ownership to me after their death. Retirement funds - in the interest of simplifying life for our mother, our father pushed hard to convert all of their traditional IRA money to a Roth IRA. I also recall my father saying he suspected at least some of us kids would likely be in high tax brackets and he did not want to drive us into higher tax brackets when inheriting their IRA. He wanted the lowest total net family tax impact on their hard-earned money.

I found your you tube channel about 18 months ago. I find most of your subjects interesting and all are very well done. This video you hit out of the park, for me it was the best video I have seen you do, maybe because it was very relevant to my situation. I watch several people who have financial you tube channels and you are one of my top 4 or 5 favorites. Best regards.

Excellent presentation!!! Thank you.

Excellent presentation as always Super organized Very clear Very understandable Comprehensive Very pertinent Excellent examples Fabulous

What a great explanation of a none so easy subject!! Great video James!

This is one of my favorite discussions on this channel. Like many on this channel, I read the book "Die With Zero" and I agree with the premise that money received when younger is exponentially more powerful than receiving an inheritance in your 60s when you are already retired, particularly if used to fund a young person's education, down payment on a first home, or even a few thousand for a months-long international backpacking trip that will make amazing memories that will last a lifetime (my trip to the Eastern-block countries after college are still vivid even after 30 years). I also agree with the books premise that a large inheritance really doesn't move the needle that much for most 60 or 70 year olds and is therefore a lost opportunity. Of course there are some people that money is a curse but there is a simple solution for them...a "Dole It Out" trust.

Thanks for another great video James!

James you nailed this thank you !

Thanks James.

Something to keep in mind. Should the need arise to place the giver into a nursing home. You need to be aware of the lookback period the government uses to determine medicaid eligibility. In some states, that period is the previous 5 years. It's just something to think about. Great video, by the way.

Thank you James, I enjoyed this and other videos as well. I have some podcasts I listen to where it feels I am somewhat spoken down to, but your even keeled delivery is purely educational and informative. You present well!

Outstanding information. Thank you.

Great video. Extremely useful information. Thanks for taking the time to make this content.

Great video - very clear, thanks

Thanks, James. Great tax info!

Great content, also good to Remember that the tax levels are set to change 2026

Great video on an important subject. I believe it's critical to understand that giving out large amounts of money to kids or grandkids may not always be helping them, but rather may be enabling them. Of course, this depends on the situation and people involved. Money can provide wonderful opportunities, but can also destroy people's lives when they don't have the character or self discipline to properly manage it.

The greatest gift I gave my kids was a fully paid college education. My next best gift will be substantial contributions to our grandkids’ 529 accounts. This ensures educational opportunities to the grandkids and allows our children to have more available to save towards their retirement.