Making significant gifts to loved ones is arguably one of the most fraught wealth management decisions.

Emotionally, we need to balance the joy of giving during our lifetimes with a potential loss of control and the prospect of unintended consequences. Practically, we need to weigh how much we can afford to give, with the realization that every dollar not transferred could be subject to a 40% federal estate tax (or more, if rates return to previous levels), as well as potential state estate taxes.


The last thing anyone wants is to have to borrow from their kids or grandkids later in life because they gave too much away. Whether you have $10 million or $100 million, a long-term cash-flow analysis – also called a lifestyle analysis – is a necessity. No one wants to be forced into significant drawdowns at the wrong time, which means that inflation and market volatility must be considered. In addition, wealthier people tend to live longer than average, and a longer life could bring unexpected and uninsurable medical expenses down the road.1
Sometimes, even those with more wealth than they would ever spend in multiple lifetimes might be afraid to give. In that case, it is important to address any anxiety from a psychological and emotional perspective, as well as from a practical one.


Some people want to know how much is enough. Other people want to learn how much is too much. Warren Buffett once said that the perfect amount to give children is “enough money so that they would feel they could do anything, but not so much that they could do nothing.”2 Unfortunately, there is no magic number.
Instead, the answer is to give loved ones no more than they are prepared for. An unprepared individual could receive a few hundred thousand dollars, and it could ruin their life – they might drop out of school, abuse drugs and alcohol, or develop a gambling addiction. On the other hand, a prepared person could be gifted millions of dollars and could still turn out well – continue to study hard, build a career, raise a family, and become a pillar of the community.
The key is to focus on preparing the family for the money. A team of good attorneys, accountants, and wealth managers should be able to help implement a successful long-term plan to invest the family’s assets and transfer the funds over multiple generations in a tax-efficient manner. The team should also focus on the work in preparing future generations for that financial wealth. This could involve financial education, communication and values exercises, and a focus on healthy family governance.


From a gift, estate, and generation-skipping transfer, or GST, tax perspective, giving sooner rather than later could provide substantial tax benefits. Not only can a married couple transfer up to $24.12 million completely free of taxes in 2022, but all the future growth of those assets could be free of any future gift, estate, and GST taxes. Moreover, the $24.12 million lifetime exemption amount per couple is set to be cut roughly in half after 2025, so families only have a relatively limited time to take advantage of the substantial potential tax savings from the larger use-it-or-lose-it exemption amount.
On the emotional front, not only do we want to see loved ones enjoy gifts while we are still alive, but studies have shown that giving to others can boost the giver’s happiness and satisfaction, increase life expectancy, reduce stress, and ease depression.3 Moreover, avoiding the topic of wealth transfer, to family members and to charity, could create more problems down the road. Even if family members currently get along, they might all end up fighting with each other over assets if they are not prepared for the wealth.
Before making any gift, it is important to prepare family members for that gift from a financial, psychological, and emotional perspective. There is not one perfect age at which to directly give money to a child or grandchild. Some young adults are perfectly equipped to manage millions of dollars in their 20s, while older adults might blow it all within a few years. The answer to when to give is only when they are ready. By starting with gifts of smaller amounts at younger ages, you can help the next generation learn to manage the wealth in an effective and healthy manner, develop greater responsibility, and become good stewards of the wealth in the future.


An individual can give to as many people as they want up to $16,000 per year – the annual exclusion amount as of 2022 – without any need to report the gift for tax purposes on a Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. In addition, individuals can pay anyone’s education or health care expenses directly without it counting toward their annual exclusion amount or lifetime exemption amount.
Making gifts to loved ones does not necessarily mean handing them cash. Instead of giving assets directly outright, gifts can be set up during the beneficiary’s lifetime for tax purposes by using trusts. In addition to tax benefits, those trusts can also be used to preserve assets as a safety net for the beneficiary’s lifetime – in other words, moderate how much is available to beneficiaries based on personal circumstances, such as supplemental income for education or consumption. Furthermore, trusts, along with the guidance and protection of a corporate trustee, could also provide beneficiaries with additional asset protection from potential creditors or even possible divorce in the future.
Setting aside gifts in trust now does not have to mean telling beneficiaries about the gift or handing them copies of account statements or balance sheets. While most states require that trust beneficiaries receive certain notices about a trust and the trust’s assets, there are some states – such as Delaware – that have special “silent trust” rules, which allow the grantor to keep information private.


Balancing equal with equitable can be a major planning challenge while trying to preserve family harmony. Differences in means and needs require each family to determine what fair means to them and what the future might hold. For example, family members with special needs may require additional financial assistance. At the same time, individuals who are financially successful now might need more support down the road due to a potential health condition or financial hardship in the future.
For many families, charity is often part of the overall wealth plan. From an income, gift, estate, and GST tax perspective, it is important to work with good advisors to structure charitable gifts in the most efficient manner for tax purposes. While a common approach is to set aside a portion of income for charity, a more recent approach among some families is to treat charity like a child when determining overall giving. For instance, a family with three children could set aside 25% for charity and the remaining 75% for the children. As discussed in the previous issue of Independent Thinking, a family philanthropy program also could be created so that generations can work together to support the family’s legacy.


Providing wealth to loved ones should truly be a gift, not simply a mechanical transfer of assets. If done correctly after preparing those loved ones for the wealth, it could provide a better quality of life, save on taxes, and prevent the negative impacts on those who are unprepared for the wealth. Consider working with your wealth advisor who can provide a financial analysis and help prepare future generations as part of an ongoing process. As Nathan Mayer Rothschild, son of the founder of the Rothschild banking dynasty, once said, “It requires a great deal of boldness and a great deal of caution to make a great fortune; and when you have got it, it requires ten times as much wit to keep it.”
Justin Miller is a Partner and National Director of Wealth Planning at Evercore Wealth Management. He can be contacted at

1 Glei DA, Lee C, Weinstein M, “Assessment of Mortality Disparities by Wealth Relative to Other Measures of Socioeconomic Status Among US Adults,” JAMA Network Open, 5(4):e226547. doi: 10.1001/jamanetworkopen.2022.6547 (Apr. 8, 2022); Finegood ED, Briley DA, Turiano NA, et al., “Association of Wealth with Longevity in US Adults at Midlife,” JAMA Health Forum, 2(7):e211652. doi: 10.1001/jamahealthforum.2021.1652 (Jul. 23, 2021).
2 Kirkland R, “Should You Leave It All to the Children?” Fortune (Sep. 29, 1986). George Clooney, as Matt King in the movie The Descendants (2011), said something similar, “you give your children enough money to do something but not enough to do nothing.”
3 Dunn EW, Aknin LB, Norton MI, “Spending money on others promotes happiness,” Science, Vol. 319, Issue 5870, pp. 1687-1688 (Mar 21 2008); Harbaugh W, Mayr U, Burghart D, “Neural Responses to Taxation and Voluntary Giving Reveal Motives for Charitable Donations,” Science, Vol. 316, Issue 5831, pp. 1622-1625 (Jun. 15, 2007).

Evercore Wealth Management, LLC ("EWM") is an investment adviser registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940. EWM prepared this material for informational purposes only and should not be viewed as advice or recommendations with respect to asset allocation or any particular investment. It is not our intention to state or imply in any manner that past results are an indication of future performance. Future results cannot be guaranteed and a loss of principal may occur. This material does not constitute financial, investment, accounting, tax or legal advice. It does not constitute an offer to buy or sell or a solicitation of any offer to buy or sell any security/instrument, or to participate in any trading strategy. The securities/instruments discussed in this material may not be suitable for all investors. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Specific needs of a client must be reviewed and assessed before determining the proper investment objective and asset allocation which may be adjusted to market circumstances. EWM may make investment decisions for its clients that are different from or inconsistent with the analysis in this report. EWM clients may invest in categories of securities or other instruments not covered in this report. Descriptions provided in this material are not substitutes for disclosure in offering documents for particular investment products. Any specific holdings discussed do not represent all of the securities purchased, sold or recommended by EWM, and the reader should not assume that investments in the companies identified and discussed were or will be profitable. Upon request, we will furnish a list of all securities recommended to clients during the past year. Performance results for individual accounts may vary due to the timing of investments, additions/withdrawals, length of relationship, and size of positions, among other reasons. Prospective investors should perform their own investigation and evaluation of investment options, should ask EWM for additional information if needed, and should consult their own attorney and other advisors. Indices are unmanaged and do not reflect fees or transaction expenses. You cannot invest directly in an index. References to benchmarks or indices are provided for information only. The securities discussed herein were holdings during the quarter. They will not always be the highest performing securities in the portfolio, but rather will have some characteristic of significance relevant to the article (e.g., reported news or event, a new contract, acquisition/divestiture, financing/refinancing, revenue or earnings, changes to management, change in relative valuation, plant strike, product recall, court ruling). EWM obtained this information from multiple sources believed to be reliable as of the date of publication; EWM, however, makes no representations as to the accuracy or completeness of such third party information. Unless otherwise noted, any recommendations, opinions and analysis herein reflect our judgment at the date of this report and are subject to change. EWM has no obligation to update, modify or amend this information or to otherwise notify a reader thereof in the event that any such information becomes outdated, inaccurate, or incomplete. EWM’s Privacy Policy is available upon request. EWM is compensated for the investment advisory services it provides, generally based on a percentage of assets under management. In addition to the investment management fees charged, clients may be responsible for additional expenses, such as brokerage fees, custody fees, and fees and expenses charged by third-party mutual funds, pooled investment vehicles, and third-party managers that may be recommended to clients. A complete description of EWM’s advisory fees is available in Part 2A of EWM’s Form ADV. Trust services are provided by Evercore Trust Company, N.A., a national trust bank regulated by the Office of the Comptroller of the Currency and/or Evercore Trust Company of Delaware, a limited purpose trust company regulated by the Delaware State Bank Commissioner, both affiliates of EWM. Custody services are provided by Evercore Trust Company, N.A. The use of any word or phrase contained herein that could be considered superlative is not intended to imply that EWM is the only firm capable of providing adequate advisory services. This material does not purport to be a complete description of our investment services. This document is prepared for the use of EWM clients and prospective clients and may not be redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of EWM. Any unauthorized use or disclosure is prohibited. The Chartered Financial Analyst and CFA trademarks are the property of CFA Institute. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and CFP® in the U.S.

IRS Circular 230 Disclosure:

Pursuant to IRS Regulations, we inform you that any U.S. Federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for (i) the purpose of avoiding IRS imposed penalties or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. This information is provided for information purposes only and does not constitute financial, investment, tax or legal advice.

©2016 Evercore Wealth Management LLC. All rights reserved.