Commentary: Give money to your grandchildren | Business columnists
• Buy stocks. Stocks and other investments can be bought by you and offered to another. You can also transfer ownership of existing shares. Keep in mind that if an investment has grown, the beneficiary will be responsible for paying capital gains taxes when the shares are sold.
• Create a trust. A trust is a useful legal entity when you own significant wealth that you want to share with your grandchildren. By establishing a trust, you decide at what age your beneficiaries can draw from the trust (while you are still alive or after your death) and the rate at which the funds are distributed.
• Donate money. There is always the possibility of giving a gift in cash.
Know the tax rules. Typically, the IRS requires disclosure of donations of cash or assets (such as stocks or property) greater than $ 15,000 per recipient using IRS Form 709. Donation rules are per person, so that you and your spouse can each donate up to $ 15,000 per beneficiary. without reporting it. While the donor is responsible for paying gift tax, the lifetime exclusion means that you can currently give up to $ 11 million in gifts with no gift tax liability.
Ask before you give. Financial aid can be a sensitive subject. Consider whether the parents of your grandchildren want to know about financial gifts for their children. This is especially true if children have access to money without any requirements as to its use or if there is a history of mismanagement of money.