Grandparents can pay for tuition using an education trust

The cost of higher education is a significant expense for most North Carolina families. Grandparents that want to ensure that their grandchildren can afford to pay for college may want to set up an education trust. An education trust may be structured to cover the educational expenses of one or multiple beneficiaries.

Education trusts are not necessarily the best option for every family, as some parents and grandparents save for college efficiently using 529 savings plans. However, there can be some estate planning benefits to setting up an education trust that a 529 savings plan cannot provide. For example, a 529 savings plan can limit a student's eligibility for financial aid, and 529 contributions by a couple may incur gift taxes if they exceed $28,000 per year for one beneficiary.

There are many different kinds of education trusts, and they may be set up with a variety of provisions. A person who would like to set up an education trust for multiple children may include equalization provisions so that all of the beneficiaries receive equal funds regardless of the schools that they choose to go to. Another kind of education trust may provide each beneficiary with full tuition payment even if the funds that are awarded to the beneficiaries vary greatly.

An estate planning attorney may be able to discuss education trusts and other types of trust documents with clients who are planning their estate. After looking at an individual's unique financial and family situation, an attorney may be able to suggest strategies for including tax-efficient gifts in an estate plan.

No Comments

Leave a comment
Comment Information
Email Us For a Response
Orsbon & Fenninger, LLP - Estate Planning

Talk With Us: Schedule A Consultation

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Office Location

Orsbon & Fenninger, LLP
4201 Congress St.
Suite 110
Charlotte, NC 28209

Toll Free: 888-314-8134
Phone: 704-900-3883
Fax: 704-556-9601
Map & Directions

Office Hours: Monday : 8:30am–5pm Tuesday : 8:30am–5pm Wednesday : 8:30am–5pm Thursday : 8:30am–5pm Friday : 8:30am–5pm