Most boomers struggle with transferring money to their kids without the IRS taking a large cut. Financial expert Lance Morgan suggests gifting up to $19,000 per person annually tax-free. This strategy helps minimize taxes on inherited retirement accounts. Planning ahead and using taxed sources can ensure more money goes to family rather than the government.

The $19,000 annual gift tax exclusion is a powerful tool that resets each year. Couples can gift up to $38,000 per person tax-free. Gifting from already-taxed sources like Roth IRAs can avoid income tax for recipients. Strategic gifting can transfer significant wealth without incurring gift tax, utilizing the lifetime exemption if needed.

Directly paying educational or medical expenses can also be tax-free gifts outside the $19,000 limit. Life insurance can pass on income-tax-free death benefits and avoid estate taxes. Gifting strategically from already-taxed sources helps ensure children receive more money without tax headaches. Wealth transfer planning is crucial to minimize the IRS’s share of inherited assets.

Read more at Yahoo Finance: Here’s the Smartest Way Boomers Can Give Kids Tax-Free Money