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Christmas Cash Gift

If you plan on gifting your children or grandchildren money for Christmas, think about the best way to do it.

If it’s a few dollars, give them cash. Everyone loves cash.

But if you will make a big gift and plan to make more in the future, how will you do it? If your children are adults, you can write them a check (but hope they don’t blow it.) If your children or grandchildren are young, you can set up a custodial account with your bank (but know they can take it all out at 21).

What about using a gift trust?

You can set up a gift trust for your loved ones and make gifts to it as often as you like. The trustee can invest the money and use it for your beneficiary for certain things like education, medical expenses and extraordinary needs. The trust significantly protects your gifts from impulse buys, irrational investments, lawsuits and your beneficiary’s divorcing spouse. Using a gift trust makes your gifting more purposeful.

If your beneficiary is a mature grown up, he or she can be his or her own trustee. And the trust assets will be very protected. If your beneficiary is a grandchild, your son or daughter can be the trustee until your grandchild is a certain age (most people choose 25, 28 or 30).

You can have a big influence on your loved ones with your gifts. Why not protect that influence?



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