Savings/Investments for Grandchildren

Bobw235

Bobw235

Senior Member
Location
Massachusetts
My wife and I are interested in setting up accounts for each of our grandchildren so that we may make gifts to them at regular intervals. One problem I foresee is that our grandchildren live over in England. While they will be hold dual citizenship, I don't think that our son has taken the steps to get them social security numbers or passports. I wonder if anyone here has had any experience in setting up such accounts for grandchildren who reside overseas? We'd like to be able to set up accounts that we control until the kids get older (they are both under five right now). Anyone have suggestions/advice? I don't think I can set these up in the UK, so they probably have to be US-based investments.
 

My granddaughters live in the US so I have 529's for them - I have a US account which is how I fund it. But I don't know if they have similar accounts in the UK. My only stepchild is in Scotland where tuition is free, so no fund was needed for her. I'm sure there must be a way to do it though. Good luck.
 
I set up 529 Plans for each of my three great grand children. I paid the round trip air fare and two months expenses in New Zealand for each of their parents when they graduated from High School.
 

I'm a selfish old lady. No one set up funds for my kids.... it was left up to me and them to figure out how to pay for their education... I extend the same right to my grandkid's parents..
 
We do not have any savings set up for our granddaughter. But this thread really gave us an idea! Would want them to have at least have a form of financial support, if they want to pursue a much more expensive course in college, or something.
 
Finally getting around to doing this. Seems that since the kids don't yet have tax IDs or social security numbers, I need to open the accounts in my name and put them as beneficiaries for now. Later on, once my son gets them social security numbers or a US tax ID, I can convert them to custodial accounts. Found a low initial deposit index mutual fund through Charles Schwab, which will allow me to fund the accounts with as little as $100. Then I can make deposits into the accounts over time and have them grow for years.
 
DO NOT NAME ANY MINOR CHILDREN as beneficiaries !!!
Let me share our experience with inheritance money designated for our children. In the 1990s my husband's aunt passed away, naming our 3 minor children as beneficiaries to several annuities. This was supposed to be college money - great! We were very thankful! However, in order to actually transfer the money, my husband and I had to be named - in court (see attorney fees and court costs here) as our own children's court appointed guardians. They had to send out notices to all our family members - in case someone wanted to contest that. BTW, the attorney told us we were fortunate that they had done us a favor and presented the three cases together - as one - instead of three separate pleas so we save some money. yay.

So, now we are the court appointed guardians. We can now accepted the money one of two ways. We can post a bond ($$$) or deposit in a fully insured saving account (low interest). We didn't like either one of those choices so we petitioned the court (more attorney fees and court cost) to deposit the funds in mutual funds. Several investment firms we talked to REFUSED to handle a guardianship account but we finally settled on Thrivent - where we, and the boys, already had accounts. That done, we still had to report to the court EVERY year so they could see we weren't using their money for our own personal gain. BTW - IF we wanted to deposit any more money or make a withdrawal - we had to go back to court for approval. (More attorney fees and court costs) ALSO, if, when they turned 18 and decided we had mis-handled those funds, they could easily SUE us, their parents, in court and win.

So, when each child became 18, we had to go back to court to dissolve the guardianship - more attorney fees and court costs. Fortunately we were able to salvage most of the inheritance and all three graduated college with degrees in IT, engineering and mathematics. It was worth while but could have been SOOOO much simpler had it been done differently. We have a great rapport with our sons so Auntie could have left the $$ to my husband and I with instructions and we could have done without the attorney fees and court costs. I realize that not everyone is as trustworthy or conscientious but there has to be a better way to do that!!

A trust would have worked BUT, since Auntie named the children by name, and not a trust, we could NOT create a trust after the fact.

SO, please be careful and ask a lot of questions!!! I caution you NOT to burden the parents to leave much appreciated money to your grandchildren. I have read, more recently, that IF you pay their college tuition - directly to the college, you can take the tax deduction for that. Just a thought.
 
Myquest55 said:
DO NOT NAME ANY MINOR CHILDREN as beneficiaries !!!
Let me share our experience with inheritance money designated for our children. In the 1990s my husband's aunt passed away, naming our 3 minor children as beneficiaries to several annuities. This was supposed to be college money - great! We were very thankful! However, in order to actually transfer the money, my husband and I had to be named - in court (see attorney fees and court costs here) as our own children's court appointed guardians. They had to send out notices to all our family members - in case someone wanted to contest that. BTW, the attorney told us we were fortunate that they had done us a favor and presented the three cases together - as one - instead of three separate pleas so we save some money. yay.

So, now we are the court appointed guardians. We can now accepted the money one of two ways. We can post a bond ($$$) or deposit in a fully insured saving account (low interest). We didn't like either one of those choices so we petitioned the court (more attorney fees and court cost) to deposit the funds in mutual funds. Several investment firms we talked to REFUSED to handle a guardianship account but we finally settled on Thrivent - where we, and the boys, already had accounts. That done, we still had to report to the court EVERY year so they could see we weren't using their money for our own personal gain. BTW - IF we wanted to deposit any more money or make a withdrawal - we had to go back to court for approval. (More attorney fees and court costs) ALSO, if, when they turned 18 and decided we had mis-handled those funds, they could easily SUE us, their parents, in court and win.

So, when each child became 18, we had to go back to court to dissolve the guardianship - more attorney fees and court costs. Fortunately we were able to salvage most of the inheritance and all three graduated college with degrees in IT, engineering and mathematics. It was worth while but could have been SOOOO much simpler had it been done differently. We have a great rapport with our sons so Auntie could have left the $$ to my husband and I with instructions and we could have done without the attorney fees and court costs. I realize that not everyone is as trustworthy or conscientious but there has to be a better way to do that!!

A trust would have worked BUT, since Auntie named the children by name, and not a trust, we could NOT create a trust after the fact.

SO, please be careful and ask a lot of questions!!! I caution you NOT to burden the parents to leave much appreciated money to your grandchildren. I have read, more recently, that IF you pay their college tuition - directly to the college, you can take the tax deduction for that. Just a thought.
Click to expand...

Turns out we could not add them as beneficiaries since they don't have social security numbers yet. We just opened up the accounts in our names and later will gift the funds to them when they're older.
 
Turns out we could not add them as beneficiaries since they don't have social security numbers yet. We just opened up the accounts in our names and later will gift the funds to them when they're older.
Click to expand...

We got our children social security numbers when they were born - in fact, I believe it was done at the hospital. We also filed taxes for them every year. They were given US Savings Bonds at birth and we declared the interest every year, especially since they didn't have enough income to pay any taxes. Thus, when they cashed them in for college money, they only had to declare the difference in the interest from the last year. Worked in their favor.

We also took out life insurance for them when they were born. Should something happen in their life time, such as an accident or illness, at least, they each have something to cover a funeral. My parents did that for each of us so we knew what we had to do. I highly recommend that! Mine now has a cash value of $45,000 we could use for an emergency. Perhaps you could council them.
 
Don't Hold Your Breath waiting for Free College Tuition as proposed by Bernie Sanders IT AIN'T GONNA HAPPEN.
 

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