When it comes to helping with college costs, grandparents don't have to commit to one big move to make a difference. There are more ways to get involved than most people realize. |
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A little at a time. An annual gift is one of the simplest options. Remember, you can give up to $19,000 per year per grandchild without triggering a gift tax filing. A larger contribution upfront. A strategy called "superfunding" allows a lump-sum contribution of up to five years' worth of the annual exclusion into a 529 plan at once. That’s up to $95,000 per grandparent in 2026. The key word is "up to." If you have a larger gift in mind, it's worth having a strategy to go with it. Paying tuition directly. Payments made directly to a qualifying educational institution are generally not subject to gift tax, regardless of amount. Just keep in mind that kids change their minds. A lot. None of these paths requires you to have everything figured out first. The right approach depends on your situation, your grandchildren's ages, and how your contribution fits with what the parents have in mind. |
Disclosure:
A 529 plan is a tax-advantaged education savings plan. Before choosing a plan, it's important to consider not only the state tax treatment but also any associated fees and expenses. Availability of a state tax deduction will depend on your state of residence, as state tax laws and treatment may vary from federal tax laws. If you make nonqualified distributions, earnings will be subject to income tax and a 10% federal penalty tax.
This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named state-registered investment advisory firm or investment advisor representative.