Palmer Rodak & Associates
Palmer Rodak & Associates
Certified Family Law Specialists State Bar of California Board of Legal SpecializationServing your Community for 19 Years
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Providing education funds for grandchildren

Many grandparents today want to help their grandsons and granddaughters achive the dream of receiving a college education. This may be in part to continue a family's tradition of pursuing higher education or it may be a means to helping their grandchildren achieve something nobody in the family has yet been able to do. Either way, when in a financial situation where they are able to help, grandparents should carefully review the options on how to do this.

As Forbes explains, the 529 account has become popular and known as a main means of saving for a college education. However, these funds have some drawbacks and grandparents especially may find a variety of types of trusts to be preferable in the end to a 529 account.

Charles Schwab indicates that a Minor's Trust or a Crummey Trust are just two types of trusts that may help people fund a grandchild's education. An irrevocable trust may also expand the investment opportunities people have compared to a 529. In addition, it allows money to be used for purposes other than education if necessary. Funds may also remain available after an education is complete but the money is safe from creditors or spendthrift spouses.

Before making a final decision, people should review and weigh the difference in income tax liability versus estate tax liability of their various option. In the end, a trust may offer the best combination of flexibility, control and financial preparation for a grandchild that makes it the right choice for a loving grandparent.

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Palmer Rodak & Associates
Certified Family Law Specialists State Bar of California Board of Legal Specialization

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