National Regifting Day: Invite Your Clients to Give the Gift of a Well-Planned
Future
During the holidays, we usually receive at least one gift that, let's face it, falls a bit flat.
When we were young, it might have been an itchy sweater from Grandma or a toy from Mom
and Dad that we had outgrown. As adults, maybe someone got your clothing size wrong or
misjudged your taste in jewelry, or you ended up with a regrettable White Elephant exchange
gift.
You could be honest with the gift giver and request a return or an exchange, but you do not
want to hurt their feelings. So you act happy and surprised, though you already know the gift is
bound for a box in the basement or a future trip to Goodwill. Then you think of someone who
would like it, and a plot is hatched: the regift.
National Regifting Day takes place on the Thursday before Christmas and celebrates giving an
unwanted gift to someone else - especially at holiday office parties - as a way to promote
sustainability and mindful consumption.1 Observers of the day follow a few simple rules: do not
regift the item to the original giver, do not regift something handmade or personalized, and
always rewrap it thoughtfully.
While National Regifting Day is lighthearted, it also reminds us of the value of intentional giving
and the importance of considering not only what we give but how it will be received.
It is a message advisors can extend to clients around the holidays as well. In estate planning,
some "gifts" can be regifted, revised, or exchanged over time, while others, once given, are
final. The key is knowing the difference and ensuring that clients have left a kind of "receipt in
the bag" in case an exchange becomes necessary and the "return window" is still open.
Regiftable Assets: What Clients Can Update While They Are Alive
Some parts of an estate plan remain flexible during a client's lifetime as long as they have
capacity. Think of these as the "regiftable" elements: the ones that can be updated or redirected
as circumstances, relationships, or goals change. With estate planning, it is not about passing
along an unwanted present but rather thoughtfully repurposing one's original intention -
adjusting how future distributions will be made to loved ones without changing the core purpose
of giving.
- Wills. Clients can revise distributions, add or remove beneficiaries, modify bequests,
and nominate or change guardians of minor children.
- Beneficiary designations. The beneficiaries they have designated on life insurance
policies, retirement accounts, and payable-on-death accounts can be updated at any
time. These designations should be thoughtfully made and coordinated with your client's
overall estate plan - for example, by naming their living trust as a beneficiary if it aligns
with their overall goals.
- Revocable trusts. Trust agreement terms, trustees, and distribution plans remain
adjustable while the client is alive and has the capacity to make decisions. However,
they should keep in mind that multijurisdictional or foreign assets can complicate
updates and require extra legal steps.
- Powers of attorney and healthcare directives. These documents can be revised or
revoked as long as the client retains capacity; progressive illness may call for staged
updates.
- Lifetime gifts and charitable plans. Your client can make gifts or donations during their
lifetime, but the flexibility of those gifts depends on the setup. Once your client gives
something outright, it usually cannot be taken back. Gifts made through a revocable trust
or donor-advised fund can typically be changed while the client still has capacity;
grantors and donors can adjust, adapt, and control their giving over their lifetime, offering
great flexibility. However, more complicated philanthropic structures, such as those
made through irrevocable giving, including trusts or foundations, are generally
permanent once established.
Returns and Exchanges: Harder to Make Changes While the Client Is Alive
Other estate planning choices come with a shorter "return window." While not completely
irreversible, they are significantly more difficult to change without court or administrative
involvement.
- Irrevocable trusts. These trusts are set up to be irrevocable after they have been
signed and generally cannot be changed. However, some states permit limited updates
and revisions under certain conditions without the need to go to court.
- Revocable living trusts during incapacity or after death. Once the trustmaker (also
called the grantor or settlor) becomes incapacitated or dies, the living trust's terms
typically become fixed - much like an irrevocable trust. In certain situations, limited
updates can still be made without court approval, depending on the state's law. Other
ways to build in flexibility include adding spendthrift provisions or giving successor
trustees certain discretionary powers, creating some wiggle room by allowing them to
make decisions or adjustments as circumstances change, without needing to alter the
trust itself.
No Returns Available: When Gifts Are Final
There are certain aspects of an estate plan that become final once they are executed, and only
in rare situations, such as cases involving fraud, coercion, or a clear mistake, can those actions
be reversed.
- Final distributions. After will or trust distributions have been made and the clients'
assets are in the hands of their beneficiaries, they generally cannot be altered or taken
back.
- Delivered lifetime gifts and finalized deeds. After your client has given a lifetime gift
or finalized a deed transferring their real property, it is permanent.
Leaving a Receipt in the Bag: Guidance for Beneficiaries
A comprehensive estate plan is more than just a set of documents; it is a roadmap for your
client's loved ones. It enables the client to include clear instructions, guidance, and personal
touches, making it easier for their family to carry out the client's wishes with confidence and
peace of mind.
- Letter of instruction or personal letter. While these letters are not usually legally
binding, they can still be incredibly helpful. Clients can use them to clarify intent,
especially for digital assets, coveted collections, sentimental items, or gifts that may
benefit from a little extra context or explanation.
- Trustee and executor guidance. Providing guidance allows your client to outline how
they would like discretionary decisions to be made, which can be especially important
when managing cross-border or multistate matters.
- Trust protectors and advisory roles. Adding these extra roles to the trust provides
flexibility for unforeseen changes; however, the authorizing provisions in the trust or will
document must be carefully drafted to avoid overlap and ensure clarity.
- Contingency planning. Planning for the unforeseen provides backup beneficiaries in
case the original recipient is unable to accept the gift.
- Organized asset documentation. Organizing documents ensures the smooth
administration of accounts, passwords, and records.
Know the Rules: Advisor Guidance to Avoid a Gifting Faux Pas
Even regifting has its etiquette, and so does estate planning.
Advisors can help clients avoid estate plan faux pas that lead to conflict or unintended
outcomes - and the legal and emotional "return lines" that come from unclear, outdated, or
inappropriate gifts - by following a few simple rules:
- Choose wisely. Advise clients to carefully consider who is receiving what and whether
those gifts align with their beneficiaries' needs and circumstances.
- Be discreet. Guide clients through sensitive updates with documentation and
confidentiality in mind.
- Avoid regifting to the original giver. Guide your clients to anticipate potential conflicts
among heirs or cobeneficiaries and plan contingencies in advance.
- Celebrate the intent. Encourage clients to focus on the "why" behind each change or
bequest. Gifting with intentionality and meaning reduces the chances that an exchange
or regift will be necessary later.
- Include a receipt. Help clients leave behind clear letters of instruction, organized asset
records, and detailed guidance for trustees and executors.
- Check the return date. Encourage clients to schedule regular reviews with their estate
planning attorney to ensure that the "gifts" in their plan still align with current laws,
relationships, and life circumstances, and that there is still time to make changes if
necessary.
A Client Gift from Both of Us
Most of us know that regifting comes with rules, and stores have return policies for a reason.
Not every gift can be freely swapped. Thoughtful gifting matters, and some things, once given,
are final.
Unlike the casual rules of regifting, the rules of estate planning are written and formal. Clients
should approach gifts from their estate seriously, with a plan that aligns with their intentions.
Our favorite gift during the holidays might be the one we give to ourselves, and that applies to
an estate plan, as it offers the gift of peace of mind that comes from having a well-planned
future. But there is something extra special about unwrapping a present from someone else.
Well-chosen gifts show a person that you understand them on a deeper level. They can
strengthen relationships, including the advisor-client relationship, and build trust.
Schedule a time for clients to "unwrap" their plans before year-end to ensure that every gift is
the right one. Feel free to add our name to the gift tag if they have planning questions.
MEREDITH | PC
4325 Windsor Centre Trail
Suite 400
Flower Mound Texas 75028
214-513-1013
This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.
You have received this newsletter because I believe you will find its content valuable. Please feel free to Contact Me if you have any questions about this or any matters relating to estate planning.
