by Bill Wald

Created on: October 25, 2010   Last Updated: December 13, 2010

Offering financial aid to children now or later is the major premise of this debate. Acceptance of that assistance will no doubt have varying degrees of response and determination by the children. That determination can drastically alter their lives and early offering by caring and thoughtful parents will usually have been weighed carefully with need and urgency considered. Knowledge of each child is balanced against potential repercussions as timing of that financial aid to children has many benefits on either side of the coin. And in some instances it will totally be a coin flip.

Financial planners at all levels dig in, do all of the numbers with all financial information of the day, add calculated guesstimates, for the children and their parents. The planners investigate all the tax consequences. Looking at tax brackets and governmental penalties with annual gift taxes currently at $13,000 or so per child per year with lifetime somewhere north of $300,000. These limits may move with changes in an administration in Federal, State and Local taxing bodies when their tax law writers will amend: credits, rebates, payback, forgiveness and grandfathering. Nobody knows what tomorrow will bring on a taxation basis.

Other than gifts of money, other assets are evaluated at estate date, purchase dates, estimated values. These too will with all likelihood be modified by tax law. Assets and evaluation can be compromised. Look at what has just transpired with the real estate and stock markets in the past months and year, tumultuous. Planners and economists were in part responsible for the debacle which destroyed, damaged, and in some cases wiped out entire estates, retirement dollars and hurt all plans in general.

Examples, presented above, are compelling reasons to offer this side of the argument a staggeringly large push to come down on the side of giving "Now". Another argument for the "Now" side is a vast majority of people are not in the category where the maximum(s) will ever be met dispersed over an average size family.

Theories of financial planners usually center around the tax liabilities, possible limits regarding: Social Security, and Medicare and Look-Backs of sizable gifting or transfer of assets for prior three years. Again that may be the ruling today and more pertinent the health and mental status of the elderly which can change in the blink of an eye.

The financial consequences

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