Apr 8, 2026
The “great wealth transfer” will see trillions of dollars passed on to heirs in the coming decades, and those with larger estates have been looking to ease the tax burden by transferring assets to their children now.
These kinds of strategies to lower estate taxes reportedly saw an uptick as the estate tax exemption was set to be reduced to about $7 million per estate (1), before the One Big Beautiful Bill Act ended up raising the exemption to $15 million (2).
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But what if you gave your children a large amount of money, and then realized that you’d given too much? According to a CNBC story, as the laws have changed, some wealthy parents are considering whether they can take some of that already-transferred wealth back (1).
But doing so could bring on a host of problems, not only with your family relationships, but with the IRS as well.
Facing a cash crunch
Imagine Luke and Erin, who decided five years ago that they would start transferring some of their assets to their three adult children. They’ve given them about $200,000 all together, with no stipulations about what the money should be spent on.
But now, the couple is anxious about their own financial situation, and they’re worried they shouldn’t have started reducing their estate so early. The value of Luke and Erin’s own home has dropped, and eventually selling it was a key part of their retirement plan.
The couple is also concerned about having enough savings in case of major health care costs, such as if one or both of them required long-term care.
They are worried about causing a major rift in the family if they ask for their money back, and they’re not even sure whether it’s all been spent.
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How you give matters
When you’re gifting assets to your adult children, there are a lot of factors to consider, but perhaps the most important question to ask yourself is whether you can afford to do so.
Planning for retirement means accounting for many variables, and making sure that your savings and investments will last in a variety of different scenarios. Factoring in possible health care costs is especially important.
If you want to give your adult children money as an early inheritance, consider what the tax implications will be.
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If your estate will be worth less than $15 million ($30 million for married couples), it now won’t be subject to federal estate taxes. However, consider whether you live in a state that has its own estate or inheritance taxes (3).
Also be aware of gift tax rules; gifts of more than $19,000 to a single recipient in a single year require that you file a gift tax return, though you can count them against your lifetime gift and estate tax exemption. Married couples can gift $38,000 from common property (4). The gift giver, not receiver, pays the tax, and the lifetime exemption is quite generous — $13.99 million as of 2025 (5).
Many families with large estates choose to put assets into trusts to transfer wealth, reduce gift and estate taxes, and retain some control over how and when the money they hand down is spent. According to CNBC, some wealthy individuals have opted to claw back assets they have gifted their children through trusts. This could be done through taking out a loan through the trust.
However, the report notes that not only can this put stress on relationships, but it could also invite IRS scrutiny.
Depending on the type of trust, and how and in which state it was set up, there may also be ways for trustees to modify or terminate a trust, CNBC reported.
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One adviser told CNBC that he has seen clients who become displeased when trusts they’ve set up for their children become so valuable that their children’s net worth surpasses their own.
“It’s happened a number of times, and they say, ‘Well, this isn’t fair. How can we reverse this?’” Todd Kesterson, of Kaufman Rossin, told CNBC (1).
Taking back a gift
Back to the scenario of Luke and Erin: while there are potential options for accessing assets from a trust, imagine that this couple gave their children cash gifts.
With very few exceptions, like a gift being given by accident or given by a person who did not have the mental capacity to make the decision, a gift is generally considered the legal property of the person receiving it, once the gift is given (6). So, Luke and Erin’s children are likely under no obligation to give back the money their parents had gifted them.
They could choose to sit down with their children and lay out their financial situation and concerns, but a conversation like this has the risk of straining their relationships, especially if their children have already spent the money.
One lawyer told CNBC that inheritance disputes in high-net-worth families are becoming more common as Americans both live longer, and become richer. “These disputes are as much about emotion as they are about money,” Scott Rahn, founding partner of RMO LLP, told CNBC.
The best way to avoid a scenario where you inadvertently give away too much is by carefully planning your retirement and estate, and making sure that you regularly revisit and adjust your plan. This ensures that you’re able to enjoy your golden years, while still giving gifts within your means.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
CNBC (1 ,2); Tax Foundation (3); IRS (4); Investopedia (5); Stimmel Law (6)
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Rebecca Payne has more than a decade of experience editing and producing both local and national daily newspapers. She's worked on the Toronto Star, the Globe and Mail, Metro, Canada's National Observer, the Virginian-Pilot and Daily Press.
