Estate Planning Tip: Gifting to Grandchildren

If you are entering your senior years and you are interested in spreading your wealth, you are probably considering ways you can help financially protect your grandchildren. Gifting to your grandchildren is not only an act of generosity and love, but it can also be financially smart for you too.

When it comes to gifting, it can be difficult to know where to start. The first step is to determine what amount you can comfortably give. The Internal Revenue Service currently allows you to give a maximum of $14,000 yearly free of any gift tax to each of your grandchildren. A married couple is allowed to give $28,000 yearly to each grandchild if they each make a gift. Again, it is important to verify that whatever amount you decide to gift will not have a negative impact on you. However, if you can afford it, gifting is a beneficial estate planning tool.

How do you “gift” money to your grandchildren? Outside of simply cutting them a check, below are a few ways you can help plan for your grandchildren’s futures:

  • Create a 529 Plan educational account and deposit the funds into it
  • Establish a trust for the benefit of minor grandchildren. Through a trust you can control the gifted funds or investments for many years, and provide asset protection of the gifted amounts for the benefit of your grandchildren.
  • Ask your bank to set-up a custodial account for each grandchild
  • Buy a life insurance policy that has a cash-value component and name the grandchild as the beneficiary
  • Establish a brokerage account in the grandchild’s name and transfer stock purchases into it
  • Investigate options provided by websites such as Upromise and Babymint

The above list is not exhaustive, so if you are interested in learning more, contact an experienced estate planning attorney at The Astill Law Firm to discuss your options! Also, check back to our blog for more detailed discussions on your gifting options.
If you have any questions about gifting to your grandchildren, contact The Astill Law Office at 801-438-8698. We have been providing high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, give us a call.