Fiction: Giving back always means giving to charity.
Fact: Gifting to family members can be just as rewarding, and it may also be an effective way to transfer wealth while reducing or avoiding taxes. Common strategies for gifting to family members include making an outright cash gift, paying college tuition or medical bills directly, and contributing to a 529 plan. These options let you give back while paring down your own estate and could be a smart investment on your part. Contributions to 529 plans grow tax-deferred, for example, and withdrawals for the beneficiary's education are tax-free at the federal level (and usually at the state level, too).
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