When prepared properly, an educational trust may help New York grandparents cover the educational expenses of their grandchildren and future generations. However, there are many questions that they may need to ask themselves before creating such a trust. For instance, it may be necessary to consider if a trust is even worthwhile. Those who are contributing more than $28,000 a year may wish to simply write a check to a grandchild’s college or university because of gift tax implications.
For those who are contributing less than $28,000 a year, it may be enough to save through a 529 plan. Once it is determined that a trust may be the way to go, it is important to consider whether an individual or pot trust is more appropriate. Furthermore, people should decide whether to offer equal dollar amounts or equal benefits to future generations.
