Do Want to Help Your Grandchildren with the Cost of College?
One question we get asked quite a bit from our clients that have grandchildren is “how can I help them with college? It’s so expensive?”
Well, we can help you create a plan that your grand kids can benefit from – no matter their age! We’ve helped clients with education accounts for newborns, for those grandchildren that are already in school to getting ready to head off to college. It’s never too late to do something, but it’s easier the earlier you start.
There are three main ways to help your grandchildren with college costs:
Gifts: You can make an outright cash gift your grandchild each year. However, there is a limit on the amount you can give that is set by the IRS. To avoid the gift tax liability, give us a call to see what that amount is because it’s subject to change.
Direct Payments: You can make direct payment to the college or university. Now, these payments are only for education costs. They do not cover dorm fees, meals, or book. Making direct payments might avoid the gift tax limit, but you should be sure to ask your tax professional to be on the safe side.
Education Accounts: You could setup a Coverdell education savings account or a Section 529 plan for your grandchild. These plans offer tax-free growth of the amount you contribute. Age, income and contributions limits apply so you will need to talk to your financial professional for more information.
To discuss any of these options or to find the one that best fits your needs and wants, please give us a call at 573-686-3053. We’ll be happy to take a look and create the best plan for you.