Everyone loves to give and receive gifts. And when we get along in life it becomes even more desirable to want to give things away to our family and loved ones. I fully support this and believe there is a lot of value and peace one receives by do this as part of when they are living. But there are a few things you should think about before your generosity kicks into gear.
The first question I always ask is, “Are you keeping enough for your needs and to live on in the future?”
This is pretty critical since you don’t want to run out of your assets and then have to go back to the ones you just gave it to and ask for some back. This is where proper financial planning comes into play and having a good understanding of your assets is very important before you give them away.
Second question, “Who and Why are you giving a gift to someone?”
There are two parts to this question. The first one is “Who” you are giving it to. Are they someone that can handle a gift at this time? Are they in a situation where they can be responsible with the money…such as a minor, in the middle of a divorce, having drug or alcohol dependency issues, etc. The second part is “Why” are you giving it to them? Is this just a gift out of love or necessity? This can set the tone for future gifts (expected and unexpected) so it is important to know why you are giving a gift to someone at a particular time.
Third question, “Do you have any expectations in return for giving this gift?”
That might sound strange but it is very common. For example, someone might give a friend a gift of a car and be expecting in return they will use it to drive them around everywhere…which might not be the case at all. So it is important for both you and the person receiving the gift to know if there are any direct or implied expectations from receiving this gift. If there are, talk about them before you make the gift to see if you are in alignment with expectations. It might not be the way you are thinking and it could save a relationship in the long run.
So before you decide to be generous and start gifting your money and assets to others, think through these questions and think about the answers. These will definitely help guide your philanthropic nature with your family and loved ones and make everyone happier in the end.