What to do something for the ggk’s as they come along. Have one a year old and another on the way. Savings bond, savings account, trust, cd? Haven’t got a clue which would be best. Want it to grow as much as possible but not become a tax burden for anyone. Would like them to be able to take it when they are 25 years old. Any and all suggestions are welcomed. Thanks
Depending on your own financial health, at that young age, making them the beneficiaries of your own trust investment account would be smart. At least until their old enough to qualify for the benefits of a Roth. No man ever amassed wealth through savings... at least that's one opinion.
Index mutual funds
Gold paces inflation. CDs dont keep up with inflation and Savings bonds aren't worth the paper they are printed on.
Gold paces inflation. CDs dont keep up with inflation and Savings bonds aren't worth the paper they are printed on.
You could open a 529 for them. You get a state tax deduction for contributions, and if they use it for qualified higher education expenses they can withdraw it tax free, similar to ROTH IRAs for retirement. It doesn't have to be used just for college. It can also be used for vocational training.
https://www.oklahoma529.com/
https://www.oklahoma529.com/
It may have changed now, and hope it did. That college fund when our grandkids were young and wanted to set up a legacy for them was a use it or lose it.
They assumed the child would live and go to college.
Sadly stuff happens and they don’t make it to college age alive. I wouldn’t want to lose it.
Again that was 20 some years ago. It may be different now.
Up to now. As of 2024 tax code you can gift a relative $18,000 a year without them having a tax burden by accepting the gift. It doesn’t count as income. It just has to be declared as a gift.
Buying land or income property, putting it into a trust will pass to grandkids or children tax free as well.
Disclaimer: I’m not a tax expert. This information came from professional attorneys and CPA’s we have paid for to give us their advice after MIl passed away to fulfill her will.
Consult your own experts for your personal way to move forward.
Definitely not a use it or lose it. It’s your money.
https://www.nerdwallet.com/article/investing/529-plan-rules
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Good to know it’s not a use it or lose it like the HCA’s used to be.
Are the unused returns taxable on the growth within that fund as capital gains?
Just tossing this out there for consideration as a rhetorical question.
Is the list of great-grandkids final? No more after the one on the way?
I ask because it could affect how you want to do this. You could do individual funds for each named kid. But what if you get more in the future, particularly after you pass away? The younger ones get kind of screwed. Their older siblings got something they didn't because you died before they were born.
Establishing a single fund (like a trust, but that is not the only thing possible) could be set up so that any future issuance gets a cut, too. However, that type of situation creates extra complexity for management and taxing potential.
FWIW
Is the list of great-grandkids final? No more after the one on the way?
I ask because it could affect how you want to do this. You could do individual funds for each named kid. But what if you get more in the future, particularly after you pass away? The younger ones get kind of screwed. Their older siblings got something they didn't because you died before they were born.
Establishing a single fund (like a trust, but that is not the only thing possible) could be set up so that any future issuance gets a cut, too. However, that type of situation creates extra complexity for management and taxing potential.
FWIW
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