There are certain things that grandparents are better off leaving to the grandchildren’s parents in most families. How to raise the grandchildren, for example, can often be a point of contention between grandparents and the parents. Unless, the parent is neglectful or abusive, the grandparents should give input but leave decisions up to the parents. However, there are other areas that grandparents do not need to leave up to the parents. One such area is paying for college. In fact, grandparents can incorporate their grandchildren’s college expenses into their estate plans.
College is extremely expensive and most families cannot afford to pay the full costs. The students have to take out loans and then pay them back after graduation. If a grandparents are in a position to help, then it benefits the grandchildren greatly and gives them a better financial foundation when starting their careers. It can also benefit the grandparents by reducing the size of their estates for estate tax purposes. Even if your grandchildren are not yet of college age, you can still give them the money in the form of a Trust. The money will gain interest income and be available when the grandchildren need it. You can also consider a 529 plan for younger children, see our blog on this topic here.
Talk to an estate planning attorney about other ways that you can help your grandchildren with your estate plan.