Financial gifts for your adult children

Published 3:32 pm Friday, May 11, 2018

Mother’s Day is almost here. If you’re a mother with grown children, you might receive flowers, candy, dinner invitations or some other type of pleasant recognition. However, you might find that you can get more enjoyment from the holiday by giving, rather than receiving. The longest-lasting gifts may be financial ones –  so here are a few moves to consider:

Contribute to your child’s IRA

Your children have earned income, they are eligible to contribute to an IRA, which offers tax benefits and an almost unlimited array of investment options. You can’t contribute directly to another person’s IRA, but you can write your child a check for that purpose. This could be a valuable gift, as many people can’t afford to contribute the maximum yearly amount, which, in 2018, is $5,500, or $6,500 for those 50 or older.

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Give gifts of stock.

You know your children pretty well, so you should be familiar with the products they buy. Why not give them some shares of stock in the companies that make these products? Your children will probably enjoy being “owners” of these companies, and if they weren’t that familiar with how the financial markets work, having these shares in their possession may greatly expand their knowledge and lead to an even greater interest in investing.

Donate to a charity in your child’s name

You might want to donate to a  charitable organization that your child supports. In years past, such a donation might have earned you a tax deduction,  but the new tax laws, which include a much higher standard deduction, may keep many  people from itemizing. Still, it’s possible for a charitable gift to provide you with a tax benefit, depending on your age. If you’re 70½ or older, you must start taking withdrawals from your traditional IRA and your 401(k) or similar employer-sponsored plan, but by moving the withdrawal directly to a qualified charitable group, the money won’t count as part of your adjusted gross  income, so, in effect, you can get a tax break from your generosity.

Review your estate strategy

Like virtually all parents, you’d probably like to be able to leave some type of legacy to your children, and possibly your grandchildren, too. So, if you haven’t already started working on your estate strategy, consider using Mother’s Day as a launching point. At the very least, you’ll want to write your will, but you may need much more than that, such as a living trust, a durable power of attorney and other documents. And don’t forget to change the beneficiary designations on your life insurance and retirement accounts if you’ve experienced a major life change, such as divorce or  remarriage. These designations are power-ful and can even supersede whatever instructions you might have left in your will. As you can guess, estate planning can be complex, so you almost certainly will want to work with a legal professional to get your arrangements in order.

Mother’s Day is a good opportunity for  your children to show their love for you, and  you can do the same for them by helping bolster their long-term security through financial gifts and legacy planning.