College Plan as Part of Your Estate Plan

The staggering cost of college makes it critical for families to plan carefully for this major expense.  In many cases grandparents want to play a role. As you examine the many financing options for your grandchildren, be sure to consider college financing in your estate plan. Make direct payments A simple, but effective, technique is to make tuition payments on behalf of your grandchild. So long as you make the payments directly to the college, they avoid gift and generation-skipping transfer (GST) tax without using up any of your $11.4 million gift or GST tax exemptions or your $15,000 annual gift tax exclusion. Threr's a disadvantage of direct payments though. If your grandchild is young, you have to wait until the student has tuition bills to pay. So there’s...