Give Wealth Intentionally. Keep the IRS Out of It.

Stone Loft Wealth Management builds structured gifting programs that maximize IRS exclusions, coordinate across family members, and reduce your taxable estate — on your timeline and your terms.

What the Annual Gift Tax Exclusion Actually Allows You to Do

Gifting strategies for high-net-worth individuals start with understanding the rules — and then building a plan that uses them fully. The federal annual gift tax exclusion allows each person to give up to $18,000 per recipient per year (2024 figure; confirm current IRS guidance for 2025) without filing a gift tax return or drawing against the lifetime exemption. A married couple can combine their exclusions to give $36,000 per recipient annually — with no gift tax owed and no paperwork required.

 

At scale, this matters significantly. A client with five family members they want to support can move $90,000 per year out of their taxable estate as an individual, or $180,000 per year as a couple — all within the annual exclusion alone. Over a decade, that's $1.8 million removed from an estate before the lifetime exemption is ever touched. The numbers compound quietly. The estate tax savings are real.

 

Beyond the annual exclusion, the federal lifetime gift and estate tax exemption sets a higher ceiling for larger transfers. Coordinating annual exclusion gifts against the lifetime exemption — and tracking that coordination carefully — is where structured gifting planning separates from ad hoc giving.

Gifting Vehicles That Match How You Actually Want to Give

Not every client wants to hand a check to their children. Some want to fund education. Some want assets to mature before they're accessible. Some want to give appreciated stock rather than cash. The right gifting vehicle depends on the goal — and the right plan uses more than one.

 

  • 529 Superfunding: Contribute up to five years of annual exclusion gifts in a single year to a 529 education savings account — $90,000 per individual or $180,000 per couple per beneficiary — without triggering gift tax. The account grows tax-free for qualified education expenses, and the assets leave your estate immediately.
  • UTMA Accounts: Uniform Transfer to Minors Act accounts allow gifts to minor children that are managed by a custodian until the child reaches the age of majority. Useful for building investment assets over time, with full control over the investment strategy during the custodial period.
  • Custodial and Trust-Held Gifts: For clients concerned about the windfall effect — a large sum becoming accessible all at once — trust structures allow gifts to distribute on milestones rather than at a fixed age. Graduation, marriage, career benchmarks, or any other condition you define.
  • Appreciated Stock Transfers: Gifting appreciated securities rather than cash allows the recipient to receive the asset at your cost basis, which can be a meaningful planning lever when the recipient is in a lower tax bracket or when the goal is long-term holding rather than immediate liquidity.

A Practical Example: Coordinated Family Gifting at Scale

How Gifting Reduces Your Taxable Estate — and Why Timing Matters

Consider a client with a $15 million estate and five family members — two adult children and three grandchildren — they want to support. As a married couple, they can gift $36,000 per recipient annually, moving $180,000 per year out of their taxable estate with no gift tax return required. Simultaneously, they superfund 529 accounts for the three grandchildren, contributing $540,000 in a single year under the five-year election. In year one alone, this family has transferred $720,000 out of a taxable estate — using only exclusions the IRS already provides. Stone Loft models these scenarios before any gift is made, so the numbers are clear and the coordination is deliberate.

 

Gifting is one of the most direct tools available for gift and estate tax planning, and it works precisely because assets transferred during your lifetime leave your estate at today's value. Future appreciation on those assets — whether in a 529 account, a custodial portfolio, or a trust — accrues outside your estate entirely. The earlier a coordinated gifting program begins, the more growth is permanently removed from the taxable estate.

 

This is the connection most clients miss: gifting isn't just generosity. It's a tax-efficient wealth transfer strategy that reduces what your heirs will owe the IRS after you're gone. A well-structured family gifting plan, maintained consistently over time, can remove millions from a taxable estate without ever triggering a gift tax return — and without requiring the kind of complex trust structures that carry their own administrative burden.

Gifting Strategy Questions, Answered

  • What is the annual gift tax exclusion for 2025?

    The IRS adjusts the annual gift tax exclusion periodically for inflation. For 2024, the exclusion is $18,000 per recipient. The 2025 figure should be confirmed directly with your advisor or via IRS guidance, as it may increase. Stone Loft monitors these thresholds annually and updates client gifting programs accordingly.

  • Does gifting reduce estate taxes?

    Yes — assets transferred during your lifetime are removed from your taxable estate, including all future appreciation on those assets. A consistent annual gifting program can remove significant value from a large estate over time, reducing the estate tax exposure your heirs would otherwise face. The reduction compounds the earlier the program begins.

  • How much can I gift to my children without gift tax?

    Each individual can give up to $18,000 per recipient per year (2024) without owing gift tax or filing a gift tax return. Married couples can combine exclusions to give $36,000 per recipient annually. Gifts above these amounts draw against the federal lifetime exemption — and only trigger actual gift tax once the lifetime exemption is exhausted.

  • Can I gift appreciated stock instead of cash?

    Yes, and in many situations it's the more efficient choice. When you gift appreciated securities, the recipient takes the asset at your original cost basis. If the recipient is in a lower income tax bracket, they may owe little or no capital gains tax when they eventually sell. This makes appreciated stock transfers a meaningful planning tool, particularly for gifts to adult children or grandchildren who are earlier in their earning years.

  • What is 529 superfunding and how does it work?

    529 superfunding — formally called the five-year election — allows a contributor to make five years' worth of annual exclusion gifts to a 529 education savings account in a single year. For 2024, that means up to $90,000 per individual or $180,000 per couple per beneficiary, contributed at once, with no gift tax owed. The assets leave your estate immediately and grow tax-free for qualified education expenses. No additional annual exclusion gifts can be made to that beneficiary during the five-year period without drawing against the lifetime exemption.