HOUSTON, TX – This year, 48% of Gen Zs and 46% of Millennials report feeling insecure about their finances, and more than half of them are living paycheck to paycheck, according to a 2025 survey by Deloitte. Many Boomers who are in a stable financial position don’t realize they can significantly contribute more money to their struggling descendants than they think without tax consequences through the annual gift tax exclusion, according to Serae Wealth, an independent wealth management firm providing bespoke financial guidance. For 2025, individuals can give up to $19,000 per recipient without incurring tax consequences, yet many affluent Boomers significantly underutilize this opportunity to transfer wealth to younger generations while reducing taxable estates.
“The $19,000 limit applies per recipient and can be given to an unlimited number of individuals,” said Joe Anderson, senior wealth manager and founding partner at Serae Wealth. “For example, a grandmother could gift $19,000 to her child, $19,000 to that child’s spouse, and $19,000 to each of two grandchildren, for a total of $76,000. Her spouse could do the same, effectively doubling the gift to $152,000 for the same family.”
A tax-free gift of $19,000 to an individual can be life-changing and used to pay down debt, purchase a vehicle, start a business, or contribute to a down payment on a home. If a gift of more than $19,000 is needed to make a more significant impact, taxes are still not applicable because it simply lowers the lifetime estate and gift tax exemption limit for the giver. In 2025, an individual can gift or leave to heirs a total of $13,990,000 before owing any federal gifting or estate taxes. This limit will rise to $15,000,000 in 2026. Next year, each spouse will have a separate $15 million exemption, resulting in a combined $30 million limit.
“If a parent gives $100,000 to a child in 2026, the first $19,000 is excluded,” explained Scott Hefty, Senior Wealth Manager and Founding Partner at Serae Wealth. “The remaining $81,000 simply counts toward the parents’ lifetime exemption. No immediate tax is owed, but the gift must be reported on IRS Form 709 to track cumulative gifting. Only when total gifts exceed the lifetime exemption of $15 million per person in 2026 would the federal gift or estate taxes apply.”
Any amount above the federal lifetime exemption is currently taxed at 40%.
“The key is to approach gifting strategically rather than reactively,” Anderson added. “By understanding the rules and planning ahead, families can make meaningful financial gifts while avoiding unnecessary tax complications and ensuring their own long-term financial security.”
