Why Some Experts Recommend Giving Money to Adult Children Now
The headline “OK, boomer: Why you should start giving your money to your adult kids now” appears to reference a recent MarketWatch article (published around mid-December 2025), which argues that in today’s tough economic climate—marked by high housing costs, student debt, and childcare expenses—parents (often baby boomers) can provide meaningful help by transferring wealth while alive rather than waiting for inheritance.
Here’s a balanced breakdown of the key arguments for (and against) gifting money to adult children sooner rather than later:
Reasons to Gift Now
- Your Kids Need It When It Matters Most Adult children (typically millennials or Gen Z) often face peak financial pressures in their 30s and 40s: buying homes, paying off debt, raising kids, or covering education. Money received later (e.g., in their 60s) is less impactful. Financial planners note that early gifts can fund down payments, debt payoff, or emergencies, creating compounding benefits over decades.
- You Get to See the Impact Many parents find joy in witnessing how the money helps—e.g., family vacations, home purchases, or financial security—rather than it being a surprise after death. This “giving while living” approach fosters family connections and allows guidance on money management.
- Tax Advantages (For Most Families)
- Annual Gift Exclusion: In 2025, you can gift up to $19,000 per recipient ($38,000 if married and splitting gifts) tax-free, with no impact on your lifetime exemption. This applies to unlimited recipients (e.g., kids, grandkids).
- Gifts reduce your taxable estate, potentially avoiding future estate taxes.
- Direct payments for tuition or medical bills are unlimited and tax-free.
- Potential Future Tax Changes The federal lifetime gift/estate tax exemption is $13.99 million per person in 2025 (about $28 million for couples). Recent legislation (One Big Beautiful Bill Act) raises it to $15 million in 2026 with no sunset, but rules can change. Gifting now locks in benefits if laws tighten later.
Potential Drawbacks and Counterpoints
- You Might Need the Money Later: Longevity and healthcare costs mean some boomers prioritize their own security. Surveys show many wealthy boomers prefer spending on themselves (travel, lifestyle) via “die with zero” philosophies.
- Tax Trade-Offs on Appreciated Assets: Inherited assets get a “step-up in basis” (reset to current value, minimizing capital gains tax when sold). Gifts carry your original basis, potentially triggering higher taxes for recipients.
- Family Dynamics: Unequal gifts can cause resentment; some worry it reduces motivation.
- Not Everyone Agrees: Trends show increasing early gifting (e.g., for homes or debt), but others preserve wealth for inheritance or charity.
How to Decide and Get Started
- Assess your finances first: Ensure your retirement is secure (no risk of outliving savings).
- Consult professionals: A financial advisor or estate planner can model scenarios, including taxes.
- Start small: Use the $19,000 annual exclusion consistently to transfer wealth gradually.
Ultimately, it’s personal—if your adult kids are struggling and you can afford to help without jeopardy, gifting now can be transformative. If not, a traditional inheritance may suffice. Many families blend both approaches.