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Boosting the Tax Benefit of Paying for Grandchildren’s Educational Expenses

Paying for a grandchild’s educational expenses can be a very tax-efficient and asset-protected way to transfer wealth that would otherwise be subject to gift or estate tax, plus an additional generation skipping tax. You can start by giving up to $80,000 ($160,000 if married) to a 529 Educational Savings, per grandchild, and then another $16,000 ($32,000 if married) every year after that. As opposed to giving money to your adult children to use to pay your grandkid’s expenses and possibly paying gift tax, you can give unlimited amounts tax-free if paid directly to a qualified educational institution. A good financial advisor can then help your adult children leverage the money they saved on your grandchild’s educational expenses…