College is extremely expensive and the cost keeps rising. Parents and grandparents routinely struggle with how they will pay for their children or grandchildren’s college education. If you plan ahead, you can make paying for the college education a part of your larger estate plan. You have many different options.
The traditional way to pay for a college education is by setting up a Trust. This allows you to set up the account long before it will be needed and let the Trust assets earn interest. However, there are other ways to pay for college if you have not planned far in advance. Parents and grandparents can directly pay tuition to the education institution. Money paid directly to an accredited school is not subject to the gift tax. You can then give living expenses to the student directly up to the gift tax limit. Another option is to set up a 529 college savings plan. However, like a Trust, that should be done long before it is needed.
Paying for college is important and most people want to see their children and grandchildren go to college without having to worry about how it will be paid for. Talk to an estate planning attorney about making your loved ones’ college expenses part of your estate plan.