Saving for a child or grandchild’s college education requires both advanced planning and a real financial commitment.
Also, thanks to state laws and federal laws/ regulations (think FASFA – the process you go through to apply for financial aid at colleges and universities) and the myriad of choices (think trusts, UTMA accounts and two different types of 529 accounts) you’ve got to really do some strategic/ advanced thinking so that you don’t start down the wrong path.
In case you’re wondering, I’m not just a lawyer but I’m a parent of 3 kids who all went to small (and to me at least – expensive) liberal arts colleges. So, I know from experience, and my own mistakes, that you can’t do too much advanced planning and you can’t get started soon enough.
College costs are higher than ever and saving for a child’s education is more complicated than ever. It requires advanced thought/planning and a real financial commitment. It’s complicated and there is no one way that’s best for every situation.
Hopefully, however, this brief review of the options, including two types of 529 plans, keeping the money and gifting as needed, the UTMA/UGMA option, as well as the more complicated trust options will help you to review your personal situation with your family, your lawyer and you tax adviser to develop a plan that’s best for everyone involved.