A Grandparents’ question

Posted by Nancy Hecht, CFP®, AIF®

Question: My husband and I are in our 70′s, retired and in good health. We have three grandchildren age 5 and under. We want to set up a trust for them which will hopefully help with their college tuition. Our plan is to contribute to it periodically as we are able. What would be the best way to set this trust up so the funds will grow – an investment account, money market account or savings account? Or is there something else we may not have considered?

Answer: I like to use the 529 College Savings accounts for this type of request. You can fund a 529 with a small amount and add as you wish. The account will be owned by one Grandparent with the other as the successor owner. This will allow for tax free withdrawals if the funds are used for qualified higher education costs. Another benefit is; if any of your Grandchildren want to apply for loans or grants, because you own the accounts, they do not have to be reported on financial statements. They are lucky Grandkids.

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Due to the inclement weather anticipated in our area from Hurricane Milton our home office in Altamonte Springs is closed Wednesday - Friday, October 9th-11th.  During this time, clients may access their accounts by contacting the custodian directly or other such third parties as they receive statements from as well.  Please check back for updates