Education trusts for grandkids?

If you want to leave money for your grandchildren you can easily do that in your will. But what forms(s) should it take? The obvious answer is to set up a trust

What you could do is set up what they call a pot trust. A pot trust is basically a pot of money from which each of the beneficiaries can request funds. It’s a simple, but you need to be careful if you intend for all of the beneficiaries to be treated the same.

Every beneficiary can dip into the pot of money that’s in that trust and some may get more than another. That’s all well and good if that’s what you intended, but unequal distribution can lead to ugly fights.

As an example, one beneficiary may go to Hunter College and the other might go to NYU. The one going to NYU might use up most of the trust before Hunter even starts college.

That’s where educational devices like a 529 plan come in.” A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.”

Since a 529 is designed with education in mind, it is designed to be flexible and to address the changing educational environment. If you need help deciding, please contact us at 347-305-4262.