Estate planning means ensuring there is a plan for what happens to your money, property and personal belongings after you pass, or if you become incapable of making those decisions. Essentially, it’s transitioning what you want, to who you want, in the manner you desire. But does wealth transfer only have to happen after death?
The Intentional Alternative: Giving While Living
An increasingly popular alternative is intentional lifetime gifting—proactively sharing your wealth while you’re still alive. This approach offers several meaningful benefits.
See the Impact Firsthand
One of the most rewarding aspects of transferring wealth during your lifetime is the ability to witness the positive impact it has on your loved ones. Whether you’re helping a child buy their first home, funding a grandchild’s education or helping the next generation build financial security, you get to be part of their journey in real time. This kind of support not only strengthens financial foundations, but it also creates opportunities to share meaningful experiences and build lasting memories together. Your generosity becomes a living legacy, one that deepens relationships and reflects your values.
Maintain Flexibility and Control
One of the key advantages of a lifetime gifting strategy is the ability to adapt future giving as circumstances evolve. Whether a family member’s financial situation changes, their needs shift or your priorities change, you can respond in real time. This flexibility allows you to make more thoughtful decisions—supporting those who are ready and responsible—and adjusting your approach when necessary. You remain in control of how much you give, when you give it and under what conditions, ensuring your generosity aligns with both your values and long-term financial goals.
Reduce Future Tax Burdens
If you are on track to have an estate tax liability upon death, giving money or assets while you’re alive can help reduce this future burden by removing those assets from your estate in the present—allowing them to potentially grow in your heir’s estate instead of your own. Gifts above the annual exclusion use a portion of the unified lifetime gift and estate tax exemption, but if the gifts are structured properly and stay within the annual exclusion amount, you can reduce the taxable value of your estate without affecting your federal estate exemption.
This can be even more important when living in states with an estate tax like Illinois.
Strengthened Family Bonds
Having open, honest conversations about money, values and legacy is one of the most powerful tools in wealth transfer. These discussions help build trust, strengthen family unity and ensure everyone understands your intentions. By sharing your goals and expectations early, you reduce the risk of confusion, resentment or conflict down the road. Transparency creates clarity—and clarity fosters peace of mind for both you and your loved ones.
Oftentimes, the strategy for intergenerational giving is largely correlated with the priorities and concerns of the giver. Whether your estate is large or small, each gifting strategy should be tailored to your financial and emotional desires.
Ways to Begin Gifting
Here are a few avenues on how to transfer wealth during your lifetime:
Annual gifting
In 2026, you can give up to $19,000 per recipient without triggering gift taxes. Married couples can give $38,000 jointly per recipient. These gifts do not reduce your lifetime exemption and often do not require IRS reporting.
Direct Payments/Family Loans & Investments
Paying directly for a loved one’s qualified education or medical expenses is another way to transfer wealth. You can also support family members by offering low-interest loans or investing in their business ventures, helping them build financial independence while keeping assets within the family.
The IRS provides special rates for intra-family loans, known as applicable federal rates (AFR), which are typically lower than commercial loan rates. If you choose this route, be sure to document the loan properly with a promissory note outlining the amount, interest rate, repayments terms and default provisions.
Roth IRA Conversions
Under current rules, non-spouse beneficiaries must fully withdraw inherited Individual Retirement Account (IRA) assets within 10 years, often triggering significant income tax. A strategic alternative is to convert traditional IRA assets to Roth IRAs during your lifetime. You pay the taxes now, allowing your heirs to receive tax-free distributions later.
This can be especially effective in years when your income is lower, spreading the tax burden over time and reducing the future tax impact on your heirs.
Gifting Experiences
In contrast to the other options which tend to involve the direct gifting of cash or assets, another way to “gift” to your loved ones is through experiences. This could mean paying for family dinners, vacations or shared experiences.
The older you get, the more valuable time becomes and a gift that buys you time with your loved ones, in any capacity, is priceless.
Conclusion
Intentional gifting is about more than just transferring wealth—it’s about creating connection, clarity and impact. Before you begin, ensure your own financial needs are covered. Then, consider using “what could be left over” to build a living legacy that reflects your values and brings joy to those you care about most.
To learn more about Busey Wealth Management’s comprehensive services, visit busey.com/wealthmanagement.
This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.
This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.
This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.