How to Make Tax-Efficient Gifts to Children, Grandchildren for Their Education
One of the most commonly asked questions we receive as estate and financial planners is how to make tax-efficient gifts to children, grandchildren and other family members for education purposes.
February 12, 2018 at 04:48 PM
8 minute read
One of the most commonly asked questions we receive as estate and financial planners is how to make tax-efficient gifts to children, grandchildren and other family members for education purposes.
The use of 529 Plans, irrevocable trusts and IRAs are among the most valuable tools available for gifting for education purposes.
529 Plans
A 529 plan or “qualified tuition plan” is an education savings plan authorized under Section 529 of the Internal Revenue Code. Such plans are generally sponsored by a state or state agency and have numerous tax benefits. Earnings in a 529 plan accumulate federal income tax-free, and distributions on earnings from the plan for qualified education expenses are not subject to federal income tax.
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