This Holiday Season, There Are Better Ways To Give To Your Family

The holidays have a way of slowing us down and reminding us of what truly matters.  Gift-giving naturally becomes part of that reflection. This year, you might find yourself looking for something that creates stability instead of more ‘stuff.’ Thoughtful financial gifts can do that, offering support that lasts longer than anything wrapped in festive paper. Before you give, it helps to understand a few options which allow you to support your family’s future while keeping more of your hard-earned resources where you want them.

Consider Annual Gifting

Federal law allows you to transfer up to a certain dollar amount each year without affecting your lifetime estate tax exemption. For many families, this provides a simple path to offer support without future tax stress. It works well when helping adult children with major life expenses such as school tuition, purchasing a home, or paying down debt.

Use Direct Payments For Education Or Medical Needs

There’s another option many families overlook — and it can be even more helpful than annual gifting. You can pay education or medical expenses directly to a school or medical provider, separate from the gift limit mentioned above. This does not count as a gift at all. Many grandparents use this method to help with private school tuition or college bills, and parents often use it during years when medical costs run high.

To make this work, the payment must go straight to the institution or provider. Sending the money to your child or grandchild removes the benefit. Keep receipts or confirmation letters with your records. These records show exactly what was paid and to whom, creating a clean and tidy paper trail.

Consider A Trust For Long-Term Support

Sometimes the goal is more than short-term help. A trust can create structure and guidance that lasts long into the future. You decide the rules, such as when a child can receive funds, what the money can be used for, and who will make decisions if you become unable to manage the trust yourself. This keeps your wishes intact and your assets protected from rushed decisions or outside pressure.

If you create a trust, choose a trustee who handles responsibilities well. Pick someone organized who communicates clearly and respects your values. Review the trust every few years, especially after major life changes like marriages, births, or large purchases. These check-ins help keep everything current and aligned with your goals.

Review Beneficiary Designations

Beneficiary forms on accounts such as life insurance, retirement plans, and investment accounts can move money to your family quickly and without court involvement. These forms override what is written in your will, so they must match your overall plan. People often assume they completed these forms years ago, then discover an outdated name still listed.

Set aside time every holiday season to check these designations. Confirm the spelling of each name, confirm the percentage each person receives, and make sure you have contingent beneficiaries listed in case your first choice is unable to accept the funds.

Bring Peace Of Mind Into The New Year

Holiday giving can feel overwhelming—especially when you want to support the people you love without creating confusion or tax issues down the road. A thoughtful plan can turn your generosity into something dependable that keeps helping long after the season ends.

For clear, practical guidance close to home, call McGrath Law Office, P.C., at the Mackinaw office (309-359-3461) or the Morton office (309-266-6211).