As the 2025 expiration of a major tax incentive approaches, many wealthy parents are rushing to transfer assets to their children. This rush is fueled by fears that a new tax law may make it harder to pass wealth on to future generations. With Vice President Kamala Harris gaining ground in the 2024 presidential race and her support for higher taxes on the rich, these families are taking swift action.

Currently, individuals can transfer up to $13.61 million tax-free to their family, while couples can give up to $27.22 million. But after 2025, this amount will likely be cut in half. Families with significant wealth are moving quickly to give money to their children before the tax laws change.

They worry that a potential Democratic president may introduce new tax rules that will reduce the benefits they can pass on. However, while wealthy parents are focusing on their children’s financial futures, many are concerned about the emotional toll of these large transfers.

Monika Hengesbach and other wealth advisors are urging families to consider the psychological effects on their children. While the tax savings are significant, it’s important to think about how sudden wealth might impact a child’s mental health and future decisions.

Wealth transfer isn’t just about money; it’s about preparing the next generation to handle the responsibilities that come with it.