Most of the time, younger — and that’s definitely a relative term — folk think of grandparents as ancient. In many cases, elderly grandparents (and parents) do need some help, physically and financially, from their children or grandchildren. If that’s your situation, you might be able to claim your older relatives as dependents and get some tax benefits for your care giving.
But in many other cases, older individuals are doing just fine, physically and financially. In fact, they’ve planned carefully and life hasn’t thrown them any major curveballs so they’re able to help their kids and grandkids.
In fact, notes Jane Bernardini, partner in the Private Client Group of the New York City-based accounting firm Anchin, Block & Anchin, the tax code offers a variety of ways for grandparents to give to their grandchildren without tax consequences.
Here are Bernardini’s thoughts on some of these opportunities, such as gifting, contributing to 529 educational savings plans, paying health care expenses, serving as a grandchild’s main source of support and establishing a grantor trust.