The Practice of Gifting Assets Is Moving to the Forefront
Why Wait?
By Patricia M. Matty, AIF
For decades, inheritance was a term associated with the end of a life — a final transfer of assets triggered by a legal will. However, as we move through 2026, a profound shift is occurring. The Great Wealth Transfer, globally, is no longer just a future projection; it is a living phenomenon.
Today’s benefactors are increasingly choosing to give while living, driven by a mix of record-high tax exemptions, economic volatility, and a desire to see their legacy in action.
The 2026 Tax Landscape: A ‘Use It or Lose It’ Mentality
The primary driver behind the current heightened awareness is the federal tax environment. Under recent legislative updates, 2026 has introduced historically high exemption limits that have caught the attention of every major wealth manager.
• Lifetime exemptions: As of Jan. 1, 2026, the federal estate and gift tax lifetime exemption has climbed to $15 million per individual (and $30 million for married couples).
• Annual exclusions: The annual gift tax exclusion stays at $19,000 per recipient, allowing individuals to chip away at their taxable estate without even touching their lifetime limit.
• Future uncertainty: While these levels are currently permanent under the One Big Beautiful Bill Act of 2025, there is a lingering ‘use it or lose it’ sentiment. Families are rushing to lock in these high exemptions before potential future shifts in the political or economic climate.
Patricia M. Matty
“Today’s benefactors are increasingly choosing to give while living, driven by a mix of record-high tax exemptions, economic volatility, and a desire to see their legacy in action.”
The Shift to Living Legacies
Beyond the math of tax brackets, there is a growing psychological trend toward early inheritance. Rather than waiting for a death to trigger a windfall, parents and grandparents are gifting assets now to help the next generation navigate a challenging economic landscape.
• The ‘cushion’ effect: With housing prices and education costs at all-time highs, early gifts are being used to fund first-home down payments, superfund 529 education plans, seed-fund new business ventures, or fund Roth IRAs for children who have earned income and qualify for contributions.
• Test run: Many families are using early gifting as a test run. By transferring smaller portions of wealth now, they can see how the next generation manages assets and provide mentorship before the full transfer occurs.
• Emotional satisfaction: There is an undeniable joy in seeing a grandchild graduate debt-free or a child start a successful company because of a timely gift or helping your children with home cost, so they don’t struggle with so much debt.
Strategic Gifting Beyond Cash
The modern awareness of gifting has evolved beyond simple bank transfers. Sophisticated strategies are now common practice. Some ways families are taking advantage of wealth transfers include:
• Making direct medical or tuition payments, which don’t count against the $19,000 annual limits;
• Charitable gifting of appreciated stock now, shifting the appreciated stock from the donor’s estate;
• Utilizing irrevocable trusts to transfer wealth out of one’s estate while being able to control the distributions to heirs; and
• Creating donor-advised funds, also known as DAFs, which provide a way to involve the next generation in philanthropic gifting, making gifts that transfer wealth out of one’s estate.
Navigating the Conversation
Despite the financial benefits, not all families address this form of wealth transfer. Some people are aware of the benefits, but a significant portion still avoids the wealth talk. Key considerations for a successful transfer include:
• Transparency: Openly discussing the intent of a gift can prevent sibling rivalry and mismanagement.
• Financial modeling: Before gifting, donors are encouraged to perform rigorous financial modeling to ensure they don’t compromise their own retirement or medical needs.
Bottom Line
Estate planning is moving from a legal chore to a family mission to transfer wealth. It’s about what you can build together while you are alive.
The heightened awareness of gifting in 2026 is creating a massive generational transfer of wealth, favorable tax laws, and a cultural shift towards active living philanthropy and building family wealth.
The information included here is intended for educational purposes only. This information should not be considered tax or legal advice. You should discuss your goals and circumstances with a qualified tax planner before making any decisions.
Patricia Matty leverages her 25 years of financial industry experience as director of Business Development to foster firm growth and advisor success at St. Germain Investment Management. Her career combines expertise in financial planning, business management, and relationship development. She holds a bachelor’s degree in business management from Westfield State College, an associate degree from Holyoke Community College, and the Accredited Investment Fiduciary designation.
