Hi there. Bridget Mackay here. I’m an attorney in Petaluma. I practice in the area of Estate Planning and Elder Law.
Today in my video blog I want to talk to you about gifting to your grandchildren. My father says being a grandparent is the best of all possible worlds. You get to spend time with your grandchildren and make great memories but you’re removed for any of the tough parenting decisions. It’s understandable you’re going to want to spoil them. You already may have provided for their parents in your trust, or your will, but you’re wondering how exactly you can benefit your grandchildren. You can gift them assets or money today and witness the many benefits that your financial gift brings, whether it’s easing their college debt or contributing to a down payment on their first home.
In 2016, you can gift each grand child up to $14,000 annually and you can double this figure if you’re married. You and your spouse can give together to one grandchild that amount, double, so $28,000.
Better yet there are no tax repercussions for you or your grandchildren. There’s no tax for you for gifting that money and there is no income tax to that grandchild from receiving that money. But one caveat, if you’re contemplating applying for Medicaid or Medi-Cal, there are consequences to this gifting. If you are in that situation, contact an experienced estate planning attorney to find out more.
Back to gifting to your grandchildren. If giving cash to your grandchildren concerns you, you can also use that $14,000 number to pay providers directly, like a school or a medical provider. Clients often use their annual gift amount which is the $14,000 to establish 529 plans for their education bound grandchildren. It has never been easier to help your grandchildren and put a solid financial foundation in place for them. And you can sit back and watch them continue to grow.