Key takeaways

• Giving while living can empower heirs earlier in life, when financial support may have the greatest impact

• Lifetime giving allows families to strengthen financial literacy and build shared goals

• This legacy planning approach can provide important tax advantages while helping preserve wealth for future generations

Estate or legacy planning can be an important part of an overall financial plan, regardless of a person’s net worth.Giving while living is one approach. This planning strategy is not only about money — it’s also about shaping a legacy and empowering the next generation.

“Giving while living,” or transferring wealth during lifetime years, can be an effective and powerful strategy for building generational wealth. Empower research shows a third of Americans (32%) plan to leave an inheritance. With the largest intergenerational wealth transfer in U.S. history already underway — some $124 trillion is projected to change hands by 2048 — lifetime giving is one option to preserve, protect, and maximize assets for heirs.

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Benefits of giving while living

The giving while living approach can offer multiple advantages, such as helping heirs grow their wealth under guidance, protecting and preserving wealth in a tax efficient manner, and fostering a family approach to charitable giving and purposeful investing.

Financial support when it can matter most

With longer life expectancies, those who transfer wealth upon death could be leaving their assets to adult children in their pre-retirement or retirement years. While an inheritance is always valuable, the impact can vary greatly depending on when it is received. For adult children, grandchildren, or other beneficiaries, receiving that financial support earlier in life might make a big difference helping them achieve financial milestones. While that might be true later in life too, at that stage it could also be adding to financial stability that’s already built.

Providing support earlier could potentially help heirs overcome financial hurdles such as educational expenses and student debt, childcare costs, or purchasing a home. Empower research shows 37% of Americans ages 18-34 would use an inheritance to help them buy a home or pay off their mortgage, and 33% would pay off credit card or personal debt. Early giving can also help empower heirs to pursue opportunities to further build their own wealth and encourage entrepreneurial endeavors like starting a business at a younger age. More than a third of Americans (32%) say they want to start their own business, and 33% of small businesses launched with less than $5,000 in capital.

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Encouraging financial literacy and fostering shared purpose

Transferring wealth during one’s lifetime can be about more than leaving money. It can also serve as an educational and legacy-cultivating tool by allowing parents or grandparents to act as mentors, model financial values, and foster financial literacy — whether through charitable giving, investing, or business. An early start can help shift mindset for heirs too: Americans who began investing when they were 18 or younger are more likely to feel confident (51%) than those who began investing at 40 or older (31%).

When families approach wealth transfer as a collaborative effort, they not only distribute assets but also build shared goals. From establishing family foundations to supporting entrepreneurial ventures, giving while living encourages open conversations about money, values, and legacy. 

Tax advantages and wealth preservation

There are also some tax-savvy reasons to consider lifetime giving. Depending on how they’re structured, annual gifts and strategic charitable giving can help preserve more wealth for loved ones and potentially maximize the assets that are passed down.

• Annual gift tax exclusion: Taxpayers can give up to a certain amount each year per person ($19,000 per recipient in 2025) without triggering a gift tax. This can add up significantly over time. Keep in mind the lifetime gift tax exclusion will kick in for any amounts over this limit.

• Charitable giving: Strategic charitable giving during one’s lifetime offers more than just benefits for the recipient — it can also enhance tax efficiency, allow greater flexibility, and align giving with both financial and personal values.

• Growth: Assets gifted— whether cash, stocks, or property — may continue to grow in the hands of heirs, outside of someone’s taxable estate. This can potentially help preserve wealth for the next generation rather than reducing it through estate taxes down the line.

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Intentional planning for a lasting legacy

Choosing whether to pass on wealth during life or after death is personal and depends on individual circumstances. Done with foresight and purpose, giving while living can potentially strengthen family bonds, build financial confidence, and help heirs pursue opportunities that might otherwise remain out of reach. When taking this approach, however, it’s essential that planning factor in safeguards for unexpected expenses in later years, such as long-term care or other medical costs to ensure financial stability.

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