How to Build Your Financial House From the Foundation Up

For generations, the traditional idea of inheritance was simple: Parents built wealth during their lifetimes, and their children received what was left after they died. That model is starting to change. More parents are asking a different question: Would some of this money do more good for my family now than it will 20 or 30 years from now? That question is especially relevant for financially secure retirees whose adult children may be facing some of the most expensive years of their lives: buying a first home, raising children, paying for education, starting a business, or managing the cost of living in an expensive area. Instead of waiting until their children are in their 50s or 60s to receive an inheritance, some families are choosing to transfer part of their wealth earlier. This is sometimes called a living inheritance . It can be a powerful strategy, but it should be approached carefully. Why Timing Matters An inheritance can be valuable at any age. But $100,000 received at age 35 may change someone's life very differently than $100,000 received at age 65. At 35, that money might help with: A down payment on a first home Paying off high-interest debt Starting or expanding a business Childcare costs Education expenses Building an emergency reserve Investing earlier for retirement At 65, many of those major life decisions may already have been made. That does not mean parents should start giving away everything they have. It simply means there may be value in thinking about when family wealth can have the greatest impact, not just how much will eventually be inherited. Your Own Financial Security Comes First Before making a significant gift, the first question should not be: “How much can I give?” It should be: “How much can I give without putting my own future at risk?” Retirement can last decades. Healthcare costs can rise. Long-term care may become necessary. Investment markets can decline. Homes need repairs. Inflation can reduce purchasing power. A gift that feels comfortable at age 65 could feel very different at age 85. Before transferring significant assets, it is important to look at expected retirement income, expenses, emergency reserves, healthcare needs, insurance coverage, and the overall estate plan. Generosity works best when it comes from financial strength. Not All Gifts Trigger an Immediate Tax Bill Many people hear the phrase “gift tax” and assume that giving a large amount of money to a child will automatically create an immediate tax bill. That is usually not how the system works. Federal tax law provides an annual gift-tax exclusion , allowing you to give up to the annual exclusion amount to a recipient without generally needing to file a gift-tax return for that gift. If a gift exceeds the annual exclusion, a gift-tax return, Form 709, may be required. That does not necessarily mean you will owe tax out of pocket. For many families, the return is primarily used to report the gift and track the amount applied against the donor's lifetime estate and gift-tax exemption. The important point is that large transfers should be planned, documented, and reported correctly rather than handled casually. Some Payments Can Be Treated Differently There are also situations where helping a family member can be structured differently than simply handing them cash. For example, qualifying tuition paid directly to an educational institution and certain medical expenses paid directly to the provider may receive special treatment for federal gift-tax purposes. That can make a meaningful difference for families helping with college or major healthcare costs. The details matter, however. The payment generally has to be made in the proper manner to qualify for the special treatment. Before moving a large amount of money, it may be worth checking in with our office first. Cash Is Not Always the Same as Appreciated Property The type of asset you give can matter just as much as the dollar amount. Cash is relatively straightforward. Appreciated stocks, real estate, business interests, and other investments can create very different tax consequences. One of the most important concepts is tax basis . When appreciated property is gifted during life, the recipient generally takes the donor's basis in the property, subject to applicable rules. Suppose you purchased an investment years ago for $100,000 and it is now worth $500,000. If you give that investment to your child, your child generally does not receive a new $500,000 tax basis simply because the gift was made. If the asset is later sold, the built-in appreciation may result in substantial capital gains. Why the “Step-Up in Basis” Matters Assets inherited at death may be treated differently. For federal tax purposes, many inherited assets receive what is commonly called a step-up in basis , generally adjusting the basis to fair market value as of the applicable valuation date. That can significantly reduce the taxable gain recognized on a later sale. This is why a family should not automatically assume that transferring appreciated stocks, real estate, or other property during life is better than allowing those assets to pass through the estate. In some situations, gifting cash while retaining highly appreciated assets may produce a better tax result. In others, there may be compelling reasons to transfer appreciated property during life. The right answer depends on the assets involved, the estate plan, the family's tax situation, and the larger objectives. Helping With a Home Can Have Long-Term Impact Housing is one of the most common reasons parents consider making significant gifts to adult children. In many markets, the biggest obstacle is not necessarily the monthly mortgage payment. It is accumulating the down payment. Parents may choose to: Gift part of the down payment Make a family loan Purchase property jointly Help with closing costs Help reduce an existing mortgage balance Each approach can have different tax, legal, and family implications. A family loan, for example, should generally be properly documented and may need to charge an appropriate interest rate. If multiple children are involved, parents may also want to decide whether the assistance is intended as a gift, a loan, an advance on inheritance, or simply help based on each child's individual circumstances. Those decisions are much easier to make before money changes hands. Education Is Another Opportunity Parents and grandparents sometimes decide education is one of the best uses of family wealth. Helping a child or grandchild graduate with less debt can provide a financial advantage that lasts for decades. Options may include: Paying qualifying tuition directly Contributing to education savings accounts Helping with graduate school Assisting with other education-related expenses Different approaches can have different tax consequences. Planning the transfer before making it can help families choose a structure that fits both the educational goal and the broader estate plan. A Living Inheritance Is About More Than Taxes Taxes matter, but they are not the only consideration. Giving money during your lifetime also changes family dynamics. Some parents worry that giving too much too soon may reduce motivation or create dependence. Others worry about fairness when children have very different financial needs. One child may need help buying a home. Another may have received substantial help with graduate school. A third may be financially independent and need very little. Equal and fair are not always the same thing. It is worth deciding how gifts will be communicated and whether lifetime assistance should be reflected in the broader estate plan. Clarity today can prevent misunderstandings later. You Also Get to See the Impact There is one benefit of a living inheritance that has nothing to do with taxes. You get to see what the money does. You can watch your child buy a home. You can see your grandchild graduate. You can help launch a family business. You can take the family on a trip everyone will remember. You can see the relief that comes from eliminating a major financial burden. For some families, that experience is more meaningful than simply leaving behind a larger account balance. Before Making a Large Gift, Ask These Questions Before transferring significant money or property, consider: Am I financially secure enough to make this gift? Could I need this money later in retirement? Is cash the best asset to transfer? Will the gift require a gift-tax return? Could gifting appreciated property create future capital gains? Would a direct tuition or medical payment be more efficient? Is this a gift, a loan, or an advance on inheritance? How will this affect my estate plan? If I have multiple children, how do I want to handle fairness? Should this decision be coordinated with my other advisers? These questions can help turn a generous idea into a thoughtful financial strategy. A Note About the Bigger Planning Picture Our office can help evaluate the tax consequences of lifetime gifts, compare different transfer strategies, and help structure transactions in a tax-conscious way. At the same time, decisions about overall estate distribution, retirement sustainability, investment strategy, and legal estate documents involve broader financial and legal considerations. For that reason, significant gifting decisions should often be coordinated with your estate attorney and financial advisor as well. We are always happy to work alongside your other advisers so the tax strategy supports the family's complete financial plan. The Goal Is Not to Give More. It Is to Give Smarter. A living inheritance is not right for every family. Some retirees need to preserve their assets for their own future. Others may prefer to transfer most wealth through their estate. Many families will ultimately use a combination of lifetime gifts and a traditional inheritance. The important point is that inheritance does not have to be something that happens automatically decades from now. If you are considering helping children or grandchildren with a home, education, business, or another major financial milestone, check in with our office before money or assets change hands. We can help you evaluate the tax consequences, compare different ways to structure the transfer, and coordinate the tax side with your broader estate and financial planning. Sometimes the best legacy is not simply what you leave behind. It is what you are able to help your family accomplish while you are still here to see it. For assistance with planning for your future, request a quote with us today!

October 2026 Individual Due Dates October 13 - Report Tips to Employer If you are an employee who works for tips and received more than $20 in tips during September, you are required to report them to your employer no later than October 13. You can use IRS Form 4070 or your own statement that includes your signature; name, address and Social Security number; employer’s name (or establishment’s name if different) and address; month or period the report covers, and total of tips received during that month or period. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 8 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed. October 15 - Individuals If you requested an automatic 6-month extension to file your income tax return for 2025, file Form 1040 and pay any tax, interest, and penalties due. October 15 - Taxpayers with Foreign Financial Interests If you received an automatic 6-month extension of time to report your 2025 foreign financial accounts to the Department of the Treasury, this is the due date for Form FinCEN 114. Weekends & Holidays: If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday. Disaster Area Extensions: Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites: FEMA: https://www.fema.gov/disaster/declarations IRS: http s ://www.irs.gov/newsroom/tax-relief-in-disaster-situations October 2026 Business Due Dates October 15 - Corporations File a 2025 calendar year income tax return (Form 1120) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic 6-month extension by April 15. October 15 - Social Security, Medicare and Withheld Income Tax If the monthly deposit rule applies, deposit the tax for payments in September. October 15 - Nonpayroll Withholding If the monthly deposit rule applies, deposit the tax for payments in September. October 15 - Last Day to Establish a Keogh Account for 2025 If you received an automatic 6-month extension of time to file your 2025 tax return and are self-employed, October 15, 2026, is the last day to establish a Keogh Retirement Account if you plan to make a contribution for 2025. October 15 - SEP IRA & Keogh Contributions Last day to contribute to a SEP or Keogh retirement plan for calendar year 2025 if your tax return is on extension through October 15. Weekends & Holidays: If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday. Disaster Area Extensions:  Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites: FEMA: https://www.fema.gov/disaster/declarations IRS: https: / /www.irs.gov/newsroom/tax-relief-in-disaster-situations