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Now or Later: How to Weigh Giving During Life vs. Giving Through Your Will

Admin • April 12, 2024

You’ve worked hard to build wealth and hope to leave a legacy for family or friends after your death. But what if you could see those loved ones benefit from your resources while you are still alive? Let’s explore the possibilities and tax details around gifting your money or assets before you pass away. 

The Benefits of Giving

Most of us have been told at some point in our lives that “‘tis better to give than to receive.” In recent decades, several studies have explored what happens in your brain when you give a gift. 

In one study , experimenters found that happiness increased more when subjects were instructed to spend money on others than when instructed to spend on themselves. Psychologists have been able to confirm that there is indeed a neurological benefit to giving gifts.

In addition to this neurological boost, one reason you may want to give gifts during your life is to watch the benefit of your gift play out. Once your retirement and medical expenses are provided for, you stand to benefit more emotionally by giving during your lifetime.

Imagine the ability to choose how to apply your gifts. Maybe you want to share a love of travel with a family member and can enable them to take a trip they couldn’t otherwise afford. You’ll be able to hear their stories and see their pictures (or even take the trip with them) and enrich both your life and theirs through your gift.

Or if you are passionate about education, you might be able to ease the burden pursuing a higher degree often brings. Instead of watching your child or grandchild struggle to balance paid work and coursework, you could give them the gift of stability during a time of transition and changing circumstances. 

You could also give a gift that funds the start-up costs of a small business or the down payment on a home. In any of these circumstances, the joy is ongoing as you see the effects of your gift play out immediately and as time goes on.

Rules on Gifting Money to Family and Others

If giving during your life appeals to you, you may have wondered how much money can you gift tax-free. Below are some of the restrictions surrounding timing and amounts to help you plan.

  • Annual Exclusion Amounts: For 2024, the IRS has set the annual exclusion amount for gift taxes at $18,000 , meaning you do not need to report any gifts up to $18,000 for any individual donee.

This rate is from one individual to another, so if you are married, you and your spouse could each gift the same individual $18,000 for a total of $36,000 for that year. If you’re interested in gifting money to adult children or grandchildren, this type of gift allows you to give money without any party having to pay taxes on the gift. 

*If you exceed the annual exclusion amount in gifts to a single donee (whether cash or fair market value for assets such as stocks, real estate, or other property), you do need to report the gift to the IRS using Form 709 .

  • Lifetime Exclusion Amounts: In addition to the annual exclusion amount for gift taxes, you’ll also want to be aware of the lifetime exclusion amount. In 2024, the individual exclusion limit is $13.61 million per individual (again, doubled for married couples). This amount is scheduled to drop back to $5 million after 2025, so plan accordingly. 

Unlike the annual gift exclusion, the lifetime exclusion is tied to the donor, not the donee. If you decided to gift two adult children $68,000 each this year, each child would exceed the annual gift exclusion amount by $20,000, bringing your lifetime exclusion amount down to $13.51 million. You will only begin paying taxes on gifts after you have given more than $13.61 million cumulatively over the annual exclusions, including the value of your estate upon your passing. The gift tax rate varies depending on the value of the gift over the exclusion amount.

Charitable Giving 

Gifts to charities are considered donations under the tax code rather than gifts. They fall into a separate category and may be tax deductible, unlike personal gifts that will not affect your taxable income rates. This is different than donating to political parties, so if you are considering a large gift to an organization, you will want to look into their tax exemption status. 

How Lifetime Giving Fits into Estate Planning

As you plan to allocate your estate after your passing, consider the lifetime exclusion limit. This limit sets the cap on both lifetime gifts and inheritance gifts. With the cap set to drop to $5 million in 2026 , savvy investors will take stock of their total assets, including real estate, investment portfolios, and valuable property such as artwork or antiques. If the value of your total estate exceeds $5 million, it might make sense to set up a plan for lifetime giving to bring your estate’s worth under the tax-triggering amount.

These limits are for the IRS and federal taxes, but several states also levy inheritance taxes that you will need to consider. Additionally, it’s important to remember that tax rates change over time. Just because a tax rate is low now doesn’t mean it will always be, and there is no guarantee that annual exemption rates will remain high. 

Unlock the Future of Your Legacy with Five Pines Wealth Management

The team at Five Pines Wealth Management believes estate planning is more than just a financial strategy, it’s a powerful tool for shaping your legacy. We’re ready to help guide you through the complexity of gift planning to ensure every gift maximizes your happiness while minimizing your tax burden.

With our expertise in federal and state taxes, we tailor a customized plan that aligns with your unique circumstances. By scheduling a meeting with us, you’re taking the first step toward your future and the future of your loved ones. We can’t wait to connect with you!

The Best Long-Term Investment Strategy? Stay Invested, Stay Calm

June 20, 2025
When markets are calm, investing can feel easy. You contribute regularly, watch your portfolio grow, and start picturing that future vacation home or early retirement. But when markets get volatile, everything changes. Suddenly, headlines are full of dire warnings. Account balances fluctuate. And the urge to do something can feel overwhelming. At Five Pine Wealth Management , we understand how emotional investing can become during periods of market uncertainty. One of the most important things we do as fiduciary financial planners is to help our clients stay grounded when the market gets choppy. Let’s walk you through how we approach investment risk management and why having a clear, disciplined philosophy matters most when volatility strikes. Our Philosophy: Think Long-Term, Not Next Week When markets are moving fast, it is easy to think that the “best long-term investment strategy” must involve taking action to avoid losses or chase gains. The reality is usually the opposite. Reacting to market noise can often do more harm than good. In fact, one of the greatest risks to long-term returns is making emotional decisions in response to short-term events. We coach our clients to stay focused on their long-term financial plans and goals. Volatility is a feature of markets, not a flaw. By designing portfolios with realistic expectations for ups and downs, we help clients stay invested through all market environments. Here is what this looks like in practice: We use broadly diversified portfolios built around low-cost ETFs. We focus on asset allocation aligned with your time horizon, goals, and risk tolerance. We do not chase trends or attempt to time the market. We regularly review and rebalance portfolios based on your financial plan, not headlines. In short, your portfolio is designed to ride out volatility, not avoid it entirely. Fiduciary Financial Planning: Advice in Your Best Interest There is a great deal of noise in the financial world, particularly during turbulent market conditions. One of the most significant ways we help cut through it is by being fiduciary financial planners. That means we are legally and ethically obligated to act in your best interest at all times. We are also fee-only advisors. We do not receive commissions for recommending one investment over another. Our primary agenda is to help you reach your goals. During market volatility, this matters more than ever. Too many investors fall prey to sales pitches disguised as “solutions” to market risk. We focus on education and long-term planning rather than quick fixes. Being a fiduciary allows us to focus on what serves you best: Keeping you aligned with your personal goals and values Helping you tune out market noise and media hype Offering sound, research-backed guidance without conflicts of interest Your Coach Through Emotional Market Cycles One of our most important roles as financial planners is helping clients manage the psychological side of investing. It is one thing to know, intellectually, that markets will recover over time. It is another thing to watch your portfolio drop 15% and not feel anxious. Market downturns create powerful emotions. Fear. Doubt. Sometimes, even panic. As humans, our instinct is to take action to relieve those feelings, even when the logical course is to stay invested. That is where we come in. We help coach clients through these moments so they can avoid costly mistakes like: Selling during a downturn and locking in losses Chasing the next hot trend during a rebound Over-concentration in “safe” assets out of fear We remind clients that volatility is a normal part of the market. Markets have experienced recessions, wars, pandemics, and political turmoil before. They will again. Over time, markets have historically rewarded patient investors who stayed the course. When you work with us, you gain a trusted partner who is here to talk through your concerns, offer perspective, and help you make decisions that serve your long-term goals. Why Staying the Course Actually Works It may seem counterintuitive, but reducing activity during market volatility often yields better outcomes. Consider this: From 1999 through 2018, if an investor missed just the 10 best days in the S&P 500, their overall return would have been cut nearly in half . Many of the best market days happen very close to the worst ones. Trying to time the market is a challenging task, even for seasoned professionals. By maintaining a disciplined investment approach and staying fully invested, you ensure that you are there for both the recoveries and the long-term growth that markets provide. Our role is to help you build a portfolio designed for precisely this kind of staying power. We structure your investment mix to help you weather market cycles without having to guess what will happen next. Educating Clients About Normal Market Cycles Another key aspect of fiduciary financial planning is helping clients understand what is “normal” in the market. Volatility is not a sign that something is broken. It is a natural part of how markets function. In fact, without volatility, markets would not offer the returns that make long-term investing so powerful. We work with clients to help them see: Why some years will be down, but others will be very strong Why trying to avoid all losses is neither realistic nor necessary How staying invested through cycles often leads to far better outcomes than jumping in and out of the market Perspective is everything . The more you understand market behavior, the less likely you are to make emotional decisions during downturns. Different Stages, Same Principles Our approach also adapts to the varying needs of clients at different stages of their financial journey. For clients in their 40s to 60s: We may focus on prudently preserving and growing wealth. We help manage sequence-of-returns risk as you approach retirement. We may emphasize income planning and portfolio sustainability. We ensure that your investment mix aligns with your evolving goals and risk tolerance. For clients in their 30s: We provide education about typical market cycles (especially if this is their first experience with volatility). We coach clients to take advantage of their longer time horizons. We help younger investors see downturns as buying opportunities, not threats. In all cases, we are committed to helping clients invest with confidence, regardless of the headlines. Ready to Build a More Resilient Investment Strategy? Market volatility will always be part of investing, but it doesn't have to derail your financial goals. As your trusted financial advisor Coeur d'Alene team, we're here to help you navigate market uncertainty with confidence through our comprehensive financial planning approach. Contact Five Pine Wealth Management today to discuss how our investment philosophy and comprehensive financial planning approach can help you navigate market uncertainty with confidence. To see how we can help you support your financial goals, send us an email or call us at 877.333.1015.  Whether you're looking to preserve the wealth you've already accumulated or build a foundation for long-term growth, our team has the experience and commitment to help you stay focused on what matters most: achieving your financial goals.

From Full House to Financial Freedom: Smart Money Moves for Empty Nesters

May 23, 2025
The day your last child leaves home hits differently. It’s not just about the quiet hallways or fewer groceries in the cart. It’s the moment you realize that the life you’ve known for 20+ years is evolving into something new. For many, that change is deeply emotional. But it’s also a golden opportunity. At Five Pine Wealth Management, we work with parents who are entering this new season of life. Maybe you’re celebrating. Perhaps you’re feeling uncertain. Likely, you’re feeling a mix of both. This new chapter comes with financial freedom and decisions to match wherever you land. Let’s explore the smart financial moves you can make as empty nesters. Empty Nesters: A New Financial Season Meet Rob and Dana. After 25 years of raising three kids, their youngest finally left for college last fall. Their house, once bustling with backpacks, soccer cleats, and half-eaten cereal bowls, suddenly felt oversized and eerily quiet. They weren’t used to grocery bills being cut in half or weekends without games and activities. But what really surprised them? Just how much less money was going out each month. They came to us with a familiar feeling: a mix of excitement and uncertainty. "We think we're in a good place," Dana said. "But are we doing what we should be doing?" This is where a financial check-in becomes vital. With fewer day-to-day expenses and more flexibility, this is a time to refocus your finances. Here’s where to focus: Revisit your monthly budget. Your spending needs have probably changed. Without dependents at home, you may find new flexibility. Redirect those dollars toward long-term goals. Refresh your financial goals. That dream trip to Italy or the kitchen renovation you’ve put off? Let’s pencil it in, but also ensure your retirement accounts are getting the love they need. Update your estate plan. Now that the kids are young adults, your wills, healthcare directives, and beneficiaries may need adjusting. Freedom looks different for everyone, but for many, it starts with clarity. Pre-Retirement Planning: Your Next Big Financial Milestone For most empty nesters, retirement is no longer a distant concept—it’s getting real. Pre-retirement planning becomes a critical focus, especially in your late 40s to mid-60s. This is often the highest-earning period of your life and the sweet spot for pre-retirement planning. Here’s what we help our clients prioritize: Maximizing retirement contributions : As an empty nester, your cash flow could increase by 12% or more . Now’s the time to supercharge your 401(k), IRA, or other investment accounts with that extra cash. If you’re 50 or older, take advantage of catch-up contributions. Evaluating your risk exposure : Is your portfolio still aligned with your risk tolerance and timeline? Consider your tax strategy: With fewer deductions (like kids at home) and possibly a high-earning year, you may want to explore Roth conversions, charitable giving, or other tax-aware strategies. Running retirement projections : We help clients answer big-picture questions like: When can I retire? Will I have enough? What lifestyle can I realistically support? These aren’t always easy questions, but they’re essential. Planning for healthcare : Don’t wait until 65 to think about Medicare. Explore long-term care insurance and out-of-pocket expectations now. Rob and Dana sat down with us to run a retirement analysis. With only 8 years until Rob planned to retire, we helped them rebalance their portfolio to reduce risk, evaluate their pension and Social Security options, and make a plan to pay off their mortgage early. The result? They now have a clear retirement date and peace of mind. Should I Downsize My Home? One of the most common questions we get from empty nesters is, “Should I downsize my home?” It’s not just a financial question. It’s an emotional one, too. That house holds birthday parties, graduation photos on the stairs, and a dent in the drywall from a wild game of indoor tag. But it may also hold higher property taxes, more space than you use, and maintenance costs that don’t serve your current lifestyle. When deciding whether to downsize, we walk clients through: Total cost of ownership : What are you paying for the space? Emotional readiness : Are you ready to let go of the home? What would moving free up? : Cash for retirement? A move to your dream location? Family needs : Will your kids (or grandkids) be visiting regularly? Would a smaller home still support that? Downsizing doesn’t always mean moving into a tiny condo. Sometimes it means relocating to a one-level home with less yard or trading square footage for a better lifestyle. For Rob and Dana, downsizing meant moving to a townhome closer to their daughter and walkable to their favorite coffee shop, all while cutting their housing costs by nearly 35%. Give Yourself Permission to Dream Again One of our favorite things about working with empty nesters is helping them rediscover what they want. For years, life revolved around the kids. College tours. Dance recitals. Saturday mornings spent on the soccer sidelines. You were investing in their future. Now, it’s time to invest in yours. That might mean: Launching the business you put on hold Traveling during off-peak seasons (because you can!) Picking up a new hobby or volunteering more Creating a legacy through charitable giving or a family foundation Whatever it is, we want to help you align your money with your vision. Ready to Rethink the Next Chapter? This stage of life is full of opportunities, but it can also raise big questions. The good news is you don’t have to figure it all out on your own. Whether you're considering downsizing, exploring early retirement, or just want to know you’re on the right path, Five Pine Wealth Management is here to help you plan wisely, invest intentionally, and live fully.  Take advantage of this pivotal financial moment. Call (877.333.1015) or email us today to schedule your empty nester strategy session. The empty nest doesn't have to feel empty. It can be the launch pad for your next chapter of financial success.