Gifting For Grandparents

Grandparents might want to consider giving a gift in the form of paying their grandchildren’s college tuition. The benefits of doing so are quite numerous.

For their grandchild, funding his or her college education can greatly benefit them financially. With the rising cost of education, students and their parents often have to borrow funds. As a result, the amount of debt that a college graduate leaves with is increasing, and it often offsets the well-paying job that the college graduate would hopefully receive. If a student leaves college debt-free, they would be at a significant financial advantage.

For the donor grandparents, a gift could provide a tax benefit. With the lifetime gift tax of $5 million and the annual exclusion of $13,000, a grandparent could make a number of gifts tax-free, which could reduce the amount of taxes that are subject to the estate tax upon their death.

See Darrell J. Canby, Grandparents Can Give a Gift, Get a Gift, MetroWest Daily News, May 28, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.