As a grandparent, you likely love being able to provide for and go the extra mile for your grandchildren. As such, you probably take their education very seriously. However, you may not know how to ensure they have the funds to excel academically. Understanding how to plan your estate to help fund your grandchild’s education expenses is crucial. The following blog explores the options available and how a Washtenaw County estate planning attorney can assist you through these challenging times.
What Are the Options for Funding My Grandchild’s Education?
If you’re interested in helping pay your grandchild’s academic costs, understanding the options you can look into is vital. One option many invest in is a state-sponsored 529 plan. This allows you to set aside funds each month for your grandchild to help them pay for their education expenses. However, this plan is not as flexible as others, and you may find the limitations too restrictive.
Another option some choose is to leave their grandchild’s education expenses as a gift in their will. However, if you have not passed when your grandchild attends high school or college, they will not be able to access the money unless you amend the will to remove the assets. It’s also important to note that you must clearly explain what the funds should be used for when writing your will. Because your grandchild becomes the sole owner of the funds left, they can do what they please with the money.
One of the best options for paying for a grandchild’s education is to create an irrevocable trust fund. Not only does this allow you to front-load up to $75,000 for your grandchild’s education, but it also is more flexible than other options. While this is used for education expenses, if an emergency should arise, they can use the funds to help cover those costs. It’s also important to understand that the trustee will make qualified transfers to the college or university, meaning it won’t affect the gift tax.
How Can a Michigan Estate Planning Attorney Help?
As you can see, there are many considerations you must make when planning your grandchild’s education expenses. Unfortunately, this process can be complex, especially if you are unfamiliar with estate planning. As such, it’s essential to enlist the assistance and guidance of an experienced estate planning attorney to help guide you through this process.
At Collis, Griffor & Hendra, we understand that you want to do everything possible to help care for your grandchildren. As such, our dedicated team can help you navigate this process to ensure you understand your options to make the best decision for you and your family. Contact our dedicated firm today to learn how we can assist you.