For many parents and grandparents, helping their children financially is one of the most meaningful things they can do. The SKG Team at Barnum Financial Group says that how wealth is transferred can matter as much as how much is given, and that the tax code offers more tools for doing it thoughtfully than most people realize.
The team highlights the following strategies available to families in 2026:
- Annual gift tax exclusion. Each person can give up to $19,000 per recipient in 2026 without filing a gift tax return. Married couples can combine their gifts for $38,000 per recipient. The exclusion resets every calendar year.
- Lifetime gift and estate tax exemption. Gifts above the annual exclusion count against a lifetime exemption, which is $15 million per individual in 2026. Because Congress can change these limits, some families choose to put the exemption to use sooner rather than later.
- Direct payments for tuition and medical care. Tuition paid directly to an educational institution, or medical expenses paid directly to a provider, are not treated as taxable gifts, regardless of amount. The payment must go straight to the institution or provider, not to the family member as reimbursement.
- 529 education savings plans. Families can “superfund” a 529 plan by contributing five years of gifts at once, or $95,000 per individual and $190,000 for married couples in 2026. Funds grow tax-free, and under current rules, unused funds can be rolled into a Roth IRA for the beneficiary, subject to limits.
- Custodial accounts (UTMA/UGMA). These accounts are simple to set up, but the child gains full control at the age of majority. They are less flexible than a trust and are subject to kiddie tax rules.
- Roth IRAs for working children. When a child has earned income, a parent can gift the money to fund a Roth IRA, giving tax-free growth decades to compound.
- Trusts. Trusts can provide control and asset protection, with distributions staggered by age or milestone. They can be a good fit when leaving money outright feels premature.
- Gifting appreciated assets. Giving stock rather than cash can shift future capital gains to a recipient who may be in a lower tax bracket. Kiddie tax rules may apply if the recipient is a minor.
The SKG Team encourages families to consider how these strategies fit into their broader financial plan, and to work with your financial, tax, and legal professionals before making larger gifts.
About the SKG Team at Barnum Financial Group
The SKG Team at Barnum Financial Group, led by Ben Soccodato and Chris Kampitsis, is a group of knowledgeable and experienced CFPs (Certified Financial Planners) and CExPs (Certified Exit Planners). They give each client their personal attention, tailored solutions, and insightful guidance for both short-term financial objectives and long-term financial goals. The SKG Team at Barnum Financial Group works with individuals and families, business owners, and they offer financial literacy programs to Fortune 500 companies. For more information visit: https://www.skgbarnum.com/