How Grandparents Can Best Support Their Grandchildren Through Estate Planning
Grandparents have a unique opportunity to leave a lasting impact on their grandchildren’s futures. With thoughtful estate planning, you can provide meaningful support, minimize taxes, and ensure your gifts are used wisely. With the right strategy, you can build a legacy that benefits your family for generations to come. Here are several options to consider:
- Use the 2025 Annual Gift Tax Exclusion
In 2025, you can gift up to $19,000 per grandchild without triggering gift taxes. For married couples, this exclusion doubles to $38,000. Over time, consistent annual gifts can provide substantial help, whether for education, housing, or long-term savings, while also reducing the size of your taxable estate. - Contribute to a 529 College Savings Plan
These accounts grow tax-free, and withdrawals for qualified educational expenses are also tax-free. In 2025, you can front-load five years’ worth of contributions, gifting up to $95,000 per grandchild (or $190,000 for couples) in a single year without incurring gift taxes. This is an excellent way to support educational goals while maximizing tax benefits. - Consider a Generation-Skipping Trust (GST)
A GST allows you to pass assets directly to your grandchildren, bypassing your children’s estates and avoiding double taxation. The GST tax exemption in 2025 is $13.99 million per individual. This strategy is ideal for grandparents who wish to preserve significant wealth while maintaining control over how and when funds are used. - Use Irrevocable Trusts to Set Conditions and Provide Protection
Irrevocable trusts give you the ability to specify how and when your grandchildren receive their inheritance, such as reaching a certain age or completing college. These trusts also protect assets from creditors, lawsuits, and marital disputes, providing added security for your legacy. - Make Direct Payments for Education and Medical Expenses
Paying tuition or medical bills directly to the institution or provider is a simple way to give without affecting your annual gift tax exclusion. These payments are not subject to gift tax and can offer significant support during critical times. - Celebrate Milestones with Financial Gifts
Birthdays, holidays, and graduations are great opportunities to make long-term contributions. Instead of—or in addition to—traditional presents, consider adding to a savings account, 529 plan, or trust in your grandchild’s name. These small gestures compound over time and build a financial foundation for their future.
Work with a Professional
To get the most from these strategies, it’s important to consult with an experienced estate planning attorney or financial advisor. They can help you structure your plan to fit your family’s unique needs and keep your legacy intact.
By combining strategic gifting, updated tax exemptions, and well-structured trusts, grandparents can create a lasting legacy that benefits their grandchildren for years to come.
Call Regal Estate Planning today to begin crafting a plan that protects your legacy and supports the next generation.