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With everything going on in the world today (including but not limited to a global pandemic and record unemployment), many people are thinking about how to help their family and friends through difficult times. Financial gifts are one way to make the lives of your loved ones a little bit easier.

Before you give a financial gift, make sure you’re in a good spot financially: Depending on your financial situation, giving family birthday money or gift cards probably won’t set you too far back. However, be careful when planning to make a larger financial gift.

Before you start giving away large sums of cash, spend some time going over your current budget and future short-term financial goals you might have. Do you have credit card debt? Is your emergency fund fully funded? Are you putting in the maximum contribution for a 401(k) match with your employer? If the answer to these questions is no, you might be better off saving up first before making financial gifts. Your loved ones will not appreciate added financial stress on their behalf.

Cash gifts: You can give up to $14,000 in cash or other assets each year to as many individuals as you want without any tax liability. Spouses can combine their annual exclusions to give $28,000 to any person tax-free. For example, you and your spouse could gift $28,000 to each of your children and grandchildren every year without incurring any taxes.

However, if gifts exceed this amount, the federal gift tax would be imposed at a current rate of 40 percent.

Pay-off liabilities: We know that debt has a major emotional and mental impact. It’s easy to see why paying off debt and liabilities can be a welcome, unforgettable gift for your loved ones.

If your loved ones have medical debt or student loans, you can help them pay off some of the debt. Note that you must make the payments directly to the providers of those services – you can’t just reimburse the person whom you want to benefit. Think about all the expenses that come up but are often overlooked: medical, dental, tuition (even textbooks and laptops). When you make the payment directly to a service provider or vendor, the money doesn’t count toward gift tax limits.

Estate Planning: Estate planning isn’t just for the ultra-rich. It ensures that you plan now so that your loved ones don’t have to deal with messy decisions when you’re no longer there. This is especially critical if you’re a parent or have people (or pets!) who depend on you for financial support. Step one of estate planning involves creating a legitimate, up to date will.

A will specifies a guardian or a caregiver for your children if you and your spouse die.It also lets you detail how your property and assets should be split among your loved ones. If you don’t have a will, the state decides how to split your property. Read more about creating a will in our article here.

A will does not apply to assets like life insurance and retirement accounts, so make sure you take the time to specify beneficiaries for those and fill out any necessary forms. Don’t forget that an additional step is to specify beneficiaries for life insurance and retirement accounts on a beneficiary form because they won’t flow through the will.

Opening bank accounts for them: You can open custodial accounts for minors to not only contribute financially to their future, but also to teach them good money habits for life. Custodial accounts give you ownership of the account until the minor is of age, at which point the account ownership is transferred over to them.

Retirement accounts are another option. You can contribute to or open a Roth IRA for adults. In the account, you can put in any amount equal to or less than the maximum they can contribute. Just be careful to explain to them that taking money out of the Roth IRA is not a viable option until they reach retirement age.

You can also open a 529 account if you specifically want to contribute to a relative’s education goals. Even if you don’t want to open an account, ask the parents of the child if they’ve already set one up that you can contribute to. The contributions, which used to be only for college expenses but are now also for kindergarten through high school education, will grow tax-free and can be used tax-free for qualified higher education expenses.

Help with living costs: Financial gifts don’t have to be flashy to be memorable. If you’ve got the space, you can offer a relative to save on rent by living with you in the short term. Additionally, doing a grocery run or taking children back-to-school shopping can be a great way to show that you care. These financial gifts also provide the receiver with the gift of time (pro-tip: gift a mom a simple spa date while you take the kids out for back to school shopping and you’ll be the family favorite for a long, long time). New parents will appreciate a Costco run more than any number of flashy toys.

Invest in personal finance education: Despite the considerable value of family wealth expected to transfer over the next few decades, RBC’s Wealth Transfer Report reveals only 37 percent of American inheritors had conversations with their benefactors about their inheritance before receiving the assets.

Along with financial gifts, don’t forget to explain the basics of the gift or any account that you might be opening for the recipient. Talk about any tax implications, the nature of the gift, and any limitations. If you think that might be awkward or if you don’t know the more technical details of the gift, guide the recipient to a financial advisor with fiduciary duty. In fact, you can even pay the consultation fees as an add-on to the financial gift. Investing time and attention into this extra step ensures that the true intention of your gift doesn’t get lost, and that the recipient can utilize the gift for their long-term financial wellbeing.