Trusts can be written for minors or for adults, with the distribution of funds outlined in the trust agreement. “A trust is a good vehicle to clearly establish your intent for your gift while also functioning as a means to reduce the size of your taxable estate for the future," said Goldman.
In these circumstances, a trust can help set up specific management plans for your assets, provide tax benefits and give your beneficiaries time to adjust to having assets held for them. If you have a straightforward estate and mature adult children, leaving assets outright to them might be appropriate.
At a glance:
You can gift your adult child up to $18,000 in 2024 without filing a gift tax return. Filing a gift tax return doesn't necessarily mean owing gift tax unless lifetime gifts exceed $13.61 million (in 2024).
The Bible strongly encourages us to care for members of our family especially older people, children, and those who may be in need. I Timothy 5:8 says, "Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever."
Key takeaways. You may want to help your adult children reach financial goals like buying a house. Before gifting money or other assets, be aware of potential tax and financial consequences. Ensure your own finances will remain sound, and work with a financial or tax professional if needed.
Deuteronomy 5:16
We are to honor our parents our whole lives, including caring for them if they need it. There are some caveats to this which we'll touch on later, but if your parents need your help and you can do so financially, you are encouraged to do so.
Bottom Line. California doesn't enforce a gift tax, but you may owe a federal one. However, you can give up to $19,000 in cash or property during the 2025 tax year and up to $18,000 in the 2024 tax year without triggering a gift tax return.
From this perspective, if you are inclined to give, you should gift as much as you can comfortably afford during your lifetime, while remaining aware of the available step-up in capital gain basis for inherited assets. So, gift your assets that have minimal gains and save your most appreciated assets for inheritance.
You can essentially give any amount of money you like as a gift to family members, friends or other individuals – as long as you do not benefit from that action in any way.
There is no universally correct age that parents should stop supporting their children once they reach adulthood, as each family will need to make the determination based on what is best for their wallets and to best support their values.
Solution – Revocable Trust
A Revocable Living Trust allows you to title the assets in the name of the Trust rather than individuals. An adult child may still be a beneficiary of the Trust, yet there is zero risk that the assets will be exposed to any of the beneficiary's creditors.
Key Takeaways: Cash gifts and income are subject to IRS reporting rules. Gifts of up to $19,000 in cash are exempt from reporting in 2025. Those who have household employees must report cash payments that exceed $2,800 in 2025.
By filling out an affidavit of motor vehicle transfer form, you will give full legal ownership to the new owner. Contact your DMV and request the form. As mentioned, the specifics of this documentation vary by state, but typically, it will require some information on you and the giftee.
If you received a gift or inheritance, do not include it in your income. However, if the gift or inheritance later produces income, you will need to pay tax on that income.
If you're still a dependent of your parents and they're paying for your higher education--room and board for example--this isn't considered a gift. A transfer of $100,000 to you directly is considered a gift and may be taxable to the giver.
No, you do not have to report money you receive as a gift as income. While any gift may be taxable, the recipient of the gift does not have to pay the gift tax. And the person who gives you the gift only needs to file a gift tax return if it's more than the $18,000 annual exclusion.
Bottom Line. The exclusions to the federal gift tax mean you can probably give $50,000 to each of your children without owing any tax. Since a gift of that size is more than the current annual exclusion of $18,000, you would have to file Form 709 to report the gift to the IRS.
You'll need to file a gift tax return even though you won't owe taxes until you exceed the lifetime gift threshold. Taxes can be tricky, so we recommend consulting your tax professional when you're thinking about gifting a car.
Gift tax is paid by the giver of money or assets, not the receiver. The good news is that this threshold is so high that few people end up having to pay the gift tax. These thresholds are referred to as exclusions.
In Matthew 15:5-6 Jesus condemns the Pharisees' practice of consecrating their possessions to God while their parents suffered need. If the tithe is the only resource available to help your parents, give it to them. However, be sure you have sacrificed your portion before you decide to give what belongs to God.
Proverbs 13:22 says “A good man leaves an inheritance to his children's children.” In the cultural context that it was written, it is clear that passing land to the children and grandchildren would enable them to survive.
On the other hand, adult children are no longer under parental authority and thus are ultimately responsible to God for the choices they make (John 9:23).