Have a child or grandchild saddled with student debt? There are gifting strategies that can help you pay it down, while also allowing you to remove assets from your taxable estate.

Things to consider

Helping to pay for a grandchild’s college education affords you an opportunity to impart your financial values and learning, as well as providing a smart way to transfer wealth without having to pay gift and estate taxes.

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Time your 529 Plan distributions

So they don’t count as income and reduce aid eligibility, consider delaying distributions from 529 Plan accounts owned by grandparents.

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Reduce your taxable estate

Under the IRS five-year gift rule, you can contribute up to $85,000 ($170,000 per couple) toward each 529 plan without incurring gift taxes.

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Make direct tuition payments

Payments made directly to a university for a grandchild’s tuition only aren’t considered taxable gifts.

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Retain control of your gift

As the owner of a 529 Plan account, you retain control of the assets and can change the account beneficiary if the child decides to forego college.

What to ask your Janney Financial Advisor

  • What options do I have to save/invest for my grandchild’s education?
  • How do 529 Plans work and how are the savings and distributions taxed?
  • Will money that I save in a 529 Plan account impact my grandchild’s eligibility for financial aid?
  • How much can I contribute before triggering gift or generation-skipping transfer taxes?





Talk with a Janney Financial Advisor

You don’t need to go it alone. Wherever you are on your wealth journey, we can build a tailored financial plan and make recommendations that are aligned with your best interest and unique needs, goals, and preferences. Contact us today to discuss how we can put a plan in place designed to help you reach your financial goals.

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