For a long time, inheritance followed a pretty familiar pattern: parents spent a lifetime building wealth, and whatever was left eventually passed to the kids.
There’s nothing wrong with that approach. But more families are starting to ask a different question: “If I’m financially secure and I already know some of this money will eventually go to my children, does it make sense to give some of it to them sooner?”
Sometimes, the answer may be yes.
Giving during your lifetime can allow your money to help at a point when your children may actually need it most. And there’s another benefit that tends to get overlooked: you get to be there to see what it does.
The Value of Giving Earlier
Suppose you live well into your 90s and your children are 25 or 30 years younger than you. They may be in their 60s by the time they receive an inheritance. At that point, hopefully, they’re doing pretty well. The mortgage may be mostly behind them. The kids are out of college. Retirement is getting close.
That’s certainly not a bad time to receive money. There really isn’t a terrible age to unexpectedly receive an inheritance.
But think about what those same dollars could have done 20 or 25 years earlier. A gift in someone’s 30s or 40s might help with a down payment on a first home. It could reduce student debt, help with college costs for the next generation, or simply provide some breathing room during the years when seemingly every expense decides to show up at once.
Seeing the Impact Firsthand
Anyone who has ever paid for childcare probably understands that last point without further explanation. The idea isn’t necessarily to give away more. It’s to think about whether moving part of a future inheritance forward could make that money more useful.
There’s also something very different about giving while you’re still around to enjoy the result. You might get to watch your daughter move into her first home. Maybe a grandchild finishes college with less debt. Perhaps your son has enough flexibility to take a chance on a business he has wanted to start for years.
And the gift doesn’t have to fund something traditionally “financial.” Maybe you pay for a family trip. Maybe you rent the big house where everyone can actually stay under one roof for a week. Those experiences absolutely count too! For some families, sharing wealth during life makes generosity part of the family story rather than something that happens only after someone is gone.
Protect Your Own Financial Security
Now, restraint still certainly matters. Having substantial assets on paper is different from having money you can comfortably afford to give away. Retirement can last a long time. Healthcare expenses can surprise you. Markets do not move in straight lines. Homes need repairs at remarkably inconvenient moments. Life has a way of finding uses for money we thought we wouldn’t need.
So before making a significant gift, I’d want to know that doing so doesn’t compromise your own independence or create unnecessary pressure on your retirement plan. That means looking at expected income, spending, available cash, future healthcare needs, and how much flexibility remains if circumstances change.
The way you give matters too. Cash, appreciated investments, real estate, and other assets can have very different tax consequences. Estate-planning considerations can also come into play. Larger gifts are worth coordinating with your financial planner, CPA, and estate-planning attorney so everyone understands what you’re trying to accomplish before assets start moving.
Decide What You Want Your Wealth to Accomplish
It may be helpful to ask yourself, “What do I really want this money to do?” This question can help frame our relationship with money throughout our lives, and I think this is ultimately the more interesting question when it comes to considering gifts to family.
Not simply, “When should my kids get their inheritance?”
Instead: “What do I want this money to accomplish for my family?”
For some people, preserving as much as possible for the next generation will be the priority. Waiting may fit that goal perfectly well. For others, it may feel more meaningful to help while their children are buying homes, raising families, building careers, or dealing with expenses that feel much larger at 38 than they probably will at 68.
There’s no rule that says the choice has to be all or nothing. You can maintain plenty of financial security for yourself, help family members when a meaningful opportunity comes along, and still leave a legacy later.
The right balance will look different for every family. And that’s really the point. An inheritance doesn’t have to begin at death simply because that’s the way it has traditionally been done. If you’re in a position to help earlier, it may be worth asking whether some of those future dollars could do more good today.
Disclosures: This material is for informational purposes only and should not be considered investment advice. Past performance is no guarantee of future results. Investing involves risk, including the potential loss of principal.
