SKG Team at Barnum Financial Group Shares Tax-Efficient Strategies for Passing Wealth to the Next Generation

For many parents and grandparents, supporting the next generation financially is among the most meaningful gifts they can make. The SKG Team at Barnum Financial Group notes that the method of transferring wealth can be just as important as the amount, and that the tax code provides several tools for doing so in a thoughtful way.

Below are some of the approaches the team highlights for families:

• Annual gift tax exclusion. Each person may give up to $19,000 to each recipient in 2026 without needing to file a gift tax return. Married couples can combine their exclusions to give $38,000 per recipient. The exclusion renews each calendar year.
• Lifetime gift and estate tax exemption. Amounts given above the annual exclusion reduce a lifetime exemption, which is $15 million per individual in 2026. Because Congress can alter these thresholds, some families prefer to use the exemption sooner rather than later.
• Direct tuition and medical payments. Tuition paid directly to an educational institution or medical bills paid directly to a provider are not considered taxable gifts, no matter the size of the payment. The money must go directly to the school or provider rather than being reimbursed to the family member.
• 529 education savings plans. Families can “superfund” a 529 plan by front-loading five years’ worth of gifts, equal to $95,000 per person or $190,000 for married couples in 2026. The account grows tax-free, and under current rules, unused funds may be rolled into a Roth IRA for the beneficiary, subject to limits.
• Custodial accounts (UTMA/UGMA). These accounts are straightforward to establish, but the child takes full control upon reaching the age of majority. They offer less flexibility than a trust and are subject to kiddie tax rules.
• Roth IRAs for working children. If a child has earned income, a parent can provide the money needed to fund a Roth IRA, allowing tax-free growth over many years.
• Trusts. Trusts can offer control and asset protection, with distributions timed by age or milestone. They may be useful when leaving assets outright would feel too early.
• Gifting appreciated assets. Donating stock instead of cash can shift future capital gains to a recipient who may be in a lower tax bracket. If the recipient is a minor, kiddie tax rules may apply.

The SKG Team says families should think about how these tools fit into a broader financial plan and should consult financial, tax, and legal professionals before making larger gifts.

The SKG Team at Barnum Financial Group is led by Ben Soccodato and Chris Kampitsis. The team includes experienced CFPs (Certified Financial Planners) and CExPs (Certified Exit Planners) who provide personalized attention, tailored solutions, and practical guidance for both near-term financial needs and long-range goals. The group works with individuals, families, and business owners, and also offers financial literacy programs to Fortune 500 companies. For more information visit: https://www.skgbarnum.com/