This may come as a shock, but most of us have gotten gifting wrong for years.
The problem is that we associate gifts with traditional celebrations: birthdays, anniversaries, holidays such as Christmas. It is the event, not the recipient, that sends us frantically shopping. Without the event, we likely would not have given a gift to the recipient.
Put that way, traditional gifting sure seems backwards.
It is time to repackage the idea of event-based gifts and replace it with the concept of “intentional” gifting.
Intentional Gifting in Estate Planning
An intentional gift is part of a thoughtful estate plan that incorporates what you want to accomplish in your life and the legacy you want to leave behind after you die. It considers your time, your talent, and your assets.
How do you start creating such an estate plan?
First, take a good look at yourself. How old are you? How is your health? What do you like doing? What impact do you want to make?
Second, look at the people and things that mean something to you. Consider family, friends, charities, pets, and anyone or anything else that you would like to make a beneficiary of your life. Where are they headed now? How can you make it better?
Third, compile a list of your assets, debts, income, and expenses. If you are younger, then you can incorporate some projections. If you are approaching the 90- year mark, then you probably need to stick with what you have now.
Drafting Your Estate Plan
After accomplishing those three beginning steps, you are ready to do an initial draft of your estate plan. Do not get hung up on things like tax implications and mechanics of putting things in place. At this stage, you are putting together your aspirations.
Start small, think big. List out what you want to accomplish for each beneficiary during your lifetime. For example, what can you do for each of your children so that they can reach their goal? How can you best emotionally support your spouse? How could you volunteer your talent to help a friend or a cause? How can you best direct your time and assets to achieve the maximum impact?
Once you have that done, go back over your plan with a reality check. Remember, you have a finite amount of time and assets. You may want to buy each of your children a first house, but you will have to temper that with being able to finance your own aging needs. You may want to coach each child’s sports team but balancing that with your job may not be possible. Be realistic. Your plan can always be changed down the road.
At this point, when you know what you want to accomplish, you bring in the experts. Your financial planner will put together an investment plan to finance it. Your CPA will give you recommendations on capital gains, income, and taxes. Your lawyer will draft the documents to implement your plan.
And you? You will do the most important part. You will rearrange your priorities so that you have the time to spend with your family and friends. You will carefully cull out all those activities that were laborious timewasters.
That brings us back to intentional gifting. A gift should be made according to your plan for an intended purpose. Don’t tie it to a forced event. Make it meaningful and purposeful.
Your event gift is for a moment. Your intentional gift is for eternity.
Hammerle Finley Can Help with Your Estate Planning Needs
Virginia Hammerle is an attorney with Hammerle Finley Law Firm. She is entering her 40th year in the practice of law. She is Board Certified in Civil Trial Law by the Texas Board of Legal specialization. Contact firstname.lastname@example.org to receive her firm’s newsletter.