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How Can I Assist In My Grandchildren's Education?
September 5, 2007
Grandparenting! I have not met a grandparent yet who does not treasure and dote upon his/her grandchildren. Playing with their grandchildren, watching them grow and spending time with them is fun, and you even get to drop them off at the end of the day! What’s not to like about that?
Often times, grandparents are looking for ways to make a lifetime impact upon their grandchildren who may someday enter the family business. In some cases, families require a certain level of education prior to attaining a position in the business. After all, grandchildren who are well educated could likely play an important role which could positively impact the value of the business. And what better way than to help fund their education!
Below are 3 a few ways to fund your grandchild’s education:
- Make contributions to a 529 College Savings plan. You can make gifts into these plans whereby the earnings grow tax deferred and if used for education the earnings are tax free. There are other tax considerations but this is the cliff notes version.
- Make payments directly to the educational institutionwithout impacting lifetime gifting allowances.
- Take advantage of your generation skipping allowance and create an educational trust for years to come. This concept is more appropriate for individuals who have a significant estate. The current generation skipping allowance is $2,000,000.
The above options can have a lasting impact upon your grandchildren. However, it is important you consult with your tax advisor prior to pursuing any of the above. Remember, my last post talked about making good financial decisions!
Posted by Dave Ciambella on September 5, 2007 | Comments (0)
