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There are several ways to help your children and grandchildren pay for their education.
Concerned about the gift tax and want to give a generous and worthwhile gift to your loved one? Pay his or her tuition directly to the college or university. Direct tuition payments do not count against the $13,000 annual exclusion (nor the $1,000,000 lifetime exemption) and will reduce your estate.
The college savings plan (529 plan) is another great option if you are concerned about gift tax. A donor can elect to shelter as much as $130,000 from gift tax (up to $65,000 for a single individual.) In most cases, the contributions are excluded from your estate. Withdrawals are tax free as long as they are used to pay tuition, fees, and books.
To give to a child that is to attend a private or parochial school, consider investing in a Coverdell Education Savings Account. Most people can invest up to $2,000 a year in the account. Withdrawals for tuition, fees, and books are tax free and may be made for students at all levels of schooling including K-12.
Your tax situation is unique and there are always tax rules and limitations that will need to be considered. We ask that you please contact us if you think you would like to act on this or any other tax planning ideas. | 
