Tips from Top CPA for Grandparent’s Day
New York, NY, July 27, 2019, Grandparent’s Day is Sunday, September 8th. Steven B. Zelin, CPA, The Singing CPA® of Zelin & Associates CPA LLC appreciates the value of giving children and grandchildren the gift of financial awareness.
Mr. Zelin talks about how people spend money. “Grandparents should strengthen the financial responsibility message given by parents to help grandchildren build healthy fiscal habits.” He proposes a match for dollars earned. The Grandparent can make a contribution to a Roth I.R.A. for the grandchild, a savings account or a 529 plan or help in the purchase of a car. “Each grandparent can now give as much as $15,000 a year tax-free to each child and grandchild,” says Mr. Zelin.
Mr. Zelin also suggests building healthy financial habits with an alternative to direct giving. “Funding one or more types of trusts can be customized to fit many financial and personal situations. An incentive trust, for example, could be instructed to distribute funds to your grandchildren in installments, at specified points in their lives, and may tie payouts to your grandchild’s accomplishments—reaching a certain income level, for example, or getting a college or graduate degree.”
Other possible financial moves for grandparents include taking care of college by setting up a state-sponsored 529 college savings plan for your grandchild.”Start early and kick in the annual gift-tax-free maximum, and your grandson or granddaughter should be in fine shape when tuition comes due,” says Mr. Zelin.
Money in 529 plans grows tax-free and withdrawals for qualified college expenses aren’t taxed, either. And, if you want to accelerate giving, you can make five years’ gifts—a maximum of $75,000—all at once. Moreover, because you control the plan, you don’t have to worry about a spendthrift scion squandering the money. “If you didn’t get around to starting a 529,” Mr. Zelin adds, “Consider sending a tuition check directly to your grandchild’s college. It won’t count against your $15,000 annual gift-tax exemption!”
Mr. Zelin says, “There are several options for helping your grandchildren learn the value of charitable giving, and many of these vehicles also offer estate tax advantages. For example, you could transfer assets from your estate into your own family foundation. Your grandchildren could get involved by helping screen grant applications or serving on the foundation’s board. A less expensive alternative is a donor-advised fund, which also lets grandparents and grandchildren confer about what charities to support.”
Mr. Zelin appreciates the importance of family and cites the words in the official song for Grandparent’s Day from Johnny Prill…”Oh Grandma and Grandpa, I love you. I love all the little things you say and do.”
Mr. Zelin may be reached directly for further information on this or other tax and personal finance issues at 646-678-4496 or firstname.lastname@example.org