Maëlis Mittig is a proud NYC Savvy Auntie, and the Director of Marketing at Francis Financial, a Boutique Wealth Management and Financial Planning firm. She has mastered various facets of the Marketing “umbrella” including Networking, Event Planning, Branding, PR, Strategic Partnerships and more. Maëlis is an active member of Step Up Women’s Network’s Connections Committee and a dedicated volunteer with The Pajama Program. She graduated with four degrees in International Relations, Business, Spanish and French from The Pennsylvania State University, and is currently working towards a certification in Event and Wedding Planning.

Consider giving securities, 529 plans or IRA instead of fancy designer gifts…

Giving non-traditional gifts, such as money, securities or savings bonds is a lot less stressful than trying to find a pair of fancy shoes for your style-conscious teenage niece or nephew. Better yet, you know that they will not grow out of a Roth IRA, 529 plan or appreciated securities.

The below gifting strategies are great ideas for the Savvy Aunties who want to help their nieces and nephews financially but would like to retain some control over how the money is spent. I personally have used several strategies below as gifts for mine!

Contribute to a 529 plan. These college savings plans allow you to invest in a portfolio of mutual funds on behalf of a niece or nephew – and even a grandchild or other beneficiary. Earnings on your investment are tax-free as long as the money is used for college.

Consider a 529 Plan:
-You can open an account on behalf of your niece or nephew (the beneficiary), even if another account has already been created.
-As an account owner, you can take advantage of certain tax benefits.
-You can contribute at your convenience and set up an automatic payment plan through your bank or payroll.
-You can maintain control over the money and where it is spent.
-You can start as soon as they are born with as low as $25.00 per month contributions.
-http://www.gradsave.com is a great source to invite family and friends to donate to your niece or nephew on their birthday or for all of their special occasions. It’s a great way to share the plan so that others can contribute as well. You can now share on social media and theme it by occasion – birthdays, baptisms, etc.
-Many 529 Plans are free to open and take approximately 10 minutes to set up.

Ex: NY 529 Plan: “You can contribute up to $13,000 a year (or $26,000 if married, filing jointly) without incurring gift taxes. Or you can choose a special election that allows you to treat a single $65,000 contribution ($130,000 for married couples) as if it were made over a 5-year period.*** Gifts in excess of these amounts may be subject to federal gift tax. For more information, consult a qualified tax advisor.”

-Gifting opportunity - Account owners can make a lump sum contribution per beneficiary and/or avoid incurring a taxable gift on this amount by electing to use five years of the annual gift tax exclusion all in one year.
-One size fits all - Most plans have very low minimum monthly contribution limits, making them attractive to all families regardless of income level.

Contribute to a Roth IRA account. If your niece or nephew earned an income this year from a summer or part-time job, you can help them get an early start on retirement by contributing to a Roth IRA. A youngster can put up to $5,000 a year in this tax-sheltered retirement account. You can help out with the dollars, but remember that your niece or nephew has to work in a real job.
-Head start on retirement - Roth IRAs are a wonderful way to save for retirement.

Give the gift of securities. Consider giving appreciated securities you've owned for a year or more to a niece or nephew who is 18 or older. When the child sells the securities, he or she will pay a lower capital gains tax rate, which means keeping more of the profits. Provided a child’s total taxable income could be kept within the 15 percent ordinary income tax bracket or less, he or she would pay less in taxes on the assets than if you still owned them. If the investments were going to be sold to pay for your nephew’s college education anyway, why not gift them to him on his 18th birthday and let him sell them, since he qualifies for a lower capital gains rate.

Published: July 9, 2012