I’m 62 and worth millions: how can I give more to my kids without getting slammed on taxes?

Benjamin Franklin is famous for many things, including this observation: Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.

Death and taxes are two dreaded topics that go hand in hand. Their confiscatory premise is a continual source of perceived injustice and creative planning as families search for legal ways to transfer more wealth without government intervention. Gift taxes were created by Congress and the IRS to discourage people from giving away assets before death in order to sidestep estate taxes. Those estate levies, sometimes called Death Taxes, apply to the total worth of an existing estate once the owner passes.

Dave Ramsey hosts a syndicated radio show devoted to personal financial advice. He recently addressed the topic of gifting when a caller wanted to give a large sum to his son-in-law for growing a business without triggering gift taxes.

The Caller's Dilemma

Dave Ramsey's syndicated radio show regularly gives financial tips to listeners seeking guidance.

• A 62-year-old with a net worth of $10 million to $12 million wants to gift money to his son-in-law for a musical instrument repair business.
• He proposed treating the initial funds (roughly $300,000) as a property or mortgage loan note, allowing the son-in-law to purchase or rent a larger workshop space.
• Subsequent cash gifts under the current $19,000 annual threshold ($38,000 for married couples using gift-splitting) could then be used to pay down the loan by installments, avoiding immediate tax reporting.

Ramsey's Advice

Ramsey concurred with the caller's plan and offered an alternative worth considering. His suggestion centered on using a portion of the federal lifetime estate tax exemption and declaring the $300,000 against that cumulative lifetime total. Under the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, that exemption is permanently set at $15 million per individual (or $30 million for married couples) beginning January 1, 2026. The 2025 lifetime exemption currently stands at $13.99 million per individual.

• Using the Unified Estate Tax Credit while alive reduces the available exemption remaining at death, though the expanded $30 million baseline for married couples substantially widens the margin of safety for most high-net-worth families.
• Although the caller is still relatively young at 62 and his estate will likely continue to grow, the permanently expanded threshold significantly reduces the risk of outgrowing the limit by tapping into it early.
• The caller's original plan also takes advantage of the inflation-adjusted upward trajectory of annual exclusions, which have reached $19,000 per recipient in both 2025 and 2026.
• Ramsey noted that loan forgiveness, also non-taxable up to annual exclusion boundaries, could be incorporated into the caller's will.
• The loan note itself can be a one-page record updated by hand and initialed each year, which the IRS considers acceptable documentation.

State-Level Tax Traps to Consider

Federal tax updates offer meaningful relief for multi-million-dollar estates, but state-level rules introduce distinct risks that many families overlook. Twelve states and the District of Columbia enforce their own estate taxes, and five states levy separate inheritance taxes. Iowa completed the phaseout of its inheritance tax for deaths on or after January 1, 2025, reducing the number of inheritance-tax states from six to five. Because state decoupling thresholds can start as low as $1 million to $2 million, an estate worth $10 million to $12 million may face no federal exposure at all yet still carry significant state liability depending on where the owner lives.

Takeaways and 24/7 Key Points:

Both the caller's plan and Ramsey's alternative are sound approaches grounded in established tax mechanics. One additional consideration worth exploring: if the son-in-law's expansion plans eventually attract outside investors or a buyout offer from a larger competitor, structuring the deal along venture capital lines could make sense. This can be formalized through Simple Agreements for Future Equity (SAFEs) or Convertible Promissory Notes. The trade-off is that payments under these instruments would trigger a 1099 tax event for the caller.

• Structuring the arrangement through equity instruments or a SAFE keeps senior debt off the workshop's balance sheet, which can improve the business's prospects for commercial bank financing or institutional backing down the road.
• If the funding converts to corporate equity, any subsequent payout distributions are categorized as qualified dividends and taxed at long-term capital gains rates rather than at ordinary income brackets generated by imputed interest.

Advanced Wealth Transfer Alternatives

For high-net-worth positions that exceed standard limits, other shielding structures can offer permanent utility. A Family Limited Partnership (FLP) lets parents consolidate business assets while retaining control as general partners and distributing non-voting limited partner equity to descendants. Because non-voting equity inherently lacks marketability, valuation discounts often reduce the taxable impact of the transfer. Intentionally Defective Grantor Trusts (IDGTs) serve a complementary purpose: they freeze asset values for estate evaluation while permitting the grantor to cover the trust's income tax liabilities independently, effectively making an additional tax-free gift to beneficiaries over time.

This article is intended to be strictly informative and opinion-based only, and not construed to be tax or financial advice. It is advised that professional tax and financial counseling be sought before undertaking any steps in that field.

Editor's note: This update corrects the number of states levying a separate inheritance tax from six to five, reflecting Iowa's completed phaseout of its inheritance tax for deaths on or after January 1, 2025, and adds context on the One Big Beautiful Bill Act signed July 4, 2025, which permanently sets the federal lifetime estate and gift tax exemption at $15 million per individual starting January 1, 2026, up from $13.99 million in 2025.

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