Provide for Grandchildren
f you have grandchildren, some grandparents want to provide for them financially. This is part of the grandparents' MA estate planning.
To improve on the grandparents' life experiences
Sometimes, they want to help the grandchildren live in a better financial way than the grandparents had.
For example, some grandparents put themselves through night school just before and after World War II. Holding day jobs, the night school was not easy. But the grandparents wanted to life themselves from family of immigrant poverty and the other having a father who died at an early age due to environmental conditions at his place of work.
Estate tax planning
Sometimes the grandparents want to give money to their family members to lower the grandparents taxable estate. In states like Massachusetts, that have an estate tax exemption of $1 million, the gifts will lower the estate taxes due on their passing.
For some people, the first goal of improving the grandchildren's lives based on the limitations of their earlier lives is coupled with the wish to lower estate taxes.
Gifts can take several different forms
The form of gifting can be either immediate or delayed. If immediate, the gift can be a check or an object, say a vehicle.
If delayed, the gift can be in the form of a trust share or a 529 account. The 529 account has several tax advantages, both income tax and estate tax benefits.