When I meet with clients to talk about their estate plans, the conversation often turns to family. For many grandparents, their greatest joy is seeing their grandchildren thrive. And for some, that means making sure education is part of their legacy.
Take one client I’ll call Mr. James. A proud grandfather of four, Mr. James told me that the best gift he could give his grandkids wasn’t a new toy or even money in the bank, it was the opportunity to go to college without a heavy financial burden. His dream was to see each of them walk across the graduation stage, ready to step into the world with confidence.
That’s where a 529 College Savings Plan came in.
Many people are surprised to learn that you can contribute up to $19,000 per year as of 2025, per beneficiary, without triggering gift taxes.
A 529 plan is a special type of savings account designed just for educational expenses. Contributions grow tax-free, and withdrawals used for qualified education costs aren’t taxed either. Best of all, as the account owner, you stay in control, even though the funds are earmarked for your grandchild.
How much can you contribute?
Many people are surprised to learn that you can contribute up to $19,000 per year as of 2025, per beneficiary, without triggering gift taxes.
Want to give more? The IRS allows you to “front-load” contributions, meaning you can make a larger lump sum gift and have it treated as if it were spread over five years. For example, a $70,000 contribution today can be spread across five years for tax purposes.
What if plans change?
Life happens. Maybe your grandchild chooses a different path and doesn’t attend college. In that case, the account isn’t wasted. You can transfer the 529 plan to another family member, or, if needed, withdraw the funds yourself (though non-educational withdrawals are taxed and penalized).
Why start now?
The sooner you start, the greater the potential for growth. Even small, consistent contributions can add up over time. And even if you don’t live to see your grandchild graduate, your planning ensures they’ll have access to those funds when the time comes.
Making education part of your legacy
For Mr. James, setting up 529 plans for his grandchildren was about more than money. It was about giving them a head start, a sense of security, and a reminder that their grandfather believed in their future.
If you’d like to explore how education can become part of your family’s legacy through estate planning, I’d be honored to guide you. Together, we can build a plan that supports your loved ones and carries your values forward.
