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4 ways to give investments as gifts

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If you're looking to contribute to their children's or grandchildren's futures, you can gift a cash investment to a retirement account like an IRA.

 

Stocks

If you've built up a substantial stock portfolio over time, you might want to share a slice of your good fortune with loved ones. Gifting shares of stock can be both a part of your wealth transfer strategy and help loved ones create a nest egg with the potential for long-term growth.

To gift stock, you'll need to contact the brokerage where you hold your shares and go through their process for retitling the shares5 you wish to gift. This process transfers the stock into the name of the person you're gifting it to. It's even possible at some brokerages to schedule a recurring stock gift to the person of your choosing.

If you want to buy stock directly for a loved one, you can gift shares by purchasing them directly through your brokerage and retitling them or from companies that specialize in gifting stocks.

 

Savings and retirement contributions

Investing in a loved one's future can be as simple as a cash gift made to a savings account.

Cash infused into a loved one's savings account can help a teen save for a car or an adult child make the down payment on their first home. For those looking for a way to contribute to their children's or grandchildren's futures, you can gift a cash investment to a retirement account like an IRA. Money gifted today can grow with tax-deferred benefits, helping your loved ones take advantage of the power of compound interest until they need to tap their savings.

With all the ways listed above to gift investments, there's sure to be a way that aligns with how you envision contributing to a loved one's future. As with any gift, be sure to speak with a financial advisor about topics such as annual limits and any potential tax implications so your good intentions don't come back to bite you at tax time.

Important disclosure information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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  2. Treasury Direct, "Series I Savings Bonds," accessed October 16, 2020. Back
  3. Ken Clark, "A Beginner's Guide to the Coverdell ESA," The Balance, published March 27, 2020, accessed October 16, 2020. Back
  4. IRS. gov, "Qualified Education Expenses," accessed October 16, 2020. Back
  5. Joshua Kennon, "How to Give Stock as a Gift," The Balance, April 29, 2020, accessed October 16, 2020. Back