College is a massive, but often necessary, expense these days. Many grandparents come to us and ask if there are smart ways to pay for their grandchild’s education expenses. There are a few different options, but which works best for one of our clients can often be dependent on how much money they have, whether or not financial aid is an issue, and other factors. So if you want to help your grandchild get the education that they deserve, make an appointment with a Rockland County wills, trusts & estates attorney who is ready to walk you through your options.

What Can an Estate Planning Lawyer Do For Me?

An experienced estate planning lawyer can look at your assets and figure out the best way for you to cover your grandchild’s education expenses. There are many different things to consider here, including tax liability and who ends up having these assets “count” as part of their wealth. We can help you figure out ways to pay for an education with minimal drawbacks.

What Are Some Smart Ways to Pay for My Grandchild’s Education?

There are a few ways to pay for your grandchild’s education with your current assets. You could use:

A 529 plan: These state-sponsored plans allow you to add funds and keep control of the account. Then the funds can be used later to pay for educational expenses. There are tax benefits for these accounts as well.

Direct tuition payments: You can also just pay the college directly. This is not considered a gift to your grandchild, so it would not be taxed.

Trusts: A minor’s trust or a Crummey trust can both be used to set aside assets that can be used by your grandchild to pay their expenses.

Are There Any Drawbacks of Paying for My Grandchild’s Education in These Ways?

There are some things that can make it a bit more difficult to simply pay for your grandchild’s education. There are rules governing certain types of accounts and trusts, and sometimes putting money into an account and having someone else use it can end up being more complicated than expected. Some things to be aware of are:

  • Your wealth could be counted as your grandchild’s assets, making it harder to qualify for financial assistance
  • There can be tax penalties when some types of accounts are withdrawn from early
  • You are only allowed to gift a certain amount of money to people each year before these gifts are considered taxable

This is why it is smart to talk to an estate planning lawyer when you are ready to make a plan.

Schedule Your Consultation With Our Estate Planning Lawyers

When you are ready to learn more about your options and how our estate planning attorneys could be of assistance, contact the Lauterbach Law Firm. We’ll schedule a consultation and help you find the best way to use your assets to help your family members achieve their goals.