• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • Communities We Serve
      • Cook County
        • Barrington
        • Glenview
        • Northbrook
        • Skokie
      • Lake County
        • Gurnee
        • Lincolnshire
        • Riverwoods
        • Vernon Hills
        • Waukegan
  • Services
    • Asset Protection & Business Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration & Probate
  • Seminars
  • Resources
    • Client Resources
      • Free Seminars
      • Estate and Gift Tax Figures
      • Free Estate Planning Worksheet
      • Is Your Estate Plan Outdated?
      • Probate Resources
        • Glenview Probate
        • Lake Forest Probate
        • Lincolnshire Probate
        • Northbrook Probate
        • Vernon Hills Probate
        • Waukegan Probate
    • Frequently Asked Questions
      • Asset Protection
      • Business Succession Planning
      • Estate Planning
      • Families Without an Estate Plan
      • Financial Planning Assistance
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Probate
      • Trust Administration & Probate
      • Trusts
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
      • Trust Administration
  • BLOG
  • Contact Us
  • Review Us

Hedeker Law

Illinois Estate Planning Attorneys

Connect with us today(847) 913-5415

Attend a Free Seminar
Home / Living Trusts / Using a Living Trust to Help Pay College Expenses for Your Grandchildren

Using a Living Trust to Help Pay College Expenses for Your Grandchildren

March 7, 2019Living Trusts

Waukegan living trust attorneysOne of the many benefits to being a grandparent is that you get to pick and choose which expenses you wish to help with and how much you wish to contribute – if at all – to the care and maintenance of your grandchildren. Most of the time, grandparents are who you turn to for the “extras,” which allows grandparents to spoil the grandkids. One common expense that many grandparents choose to help with is the high cost of a college education. If you are planning to contribute to your grandchildren’s college expenses, the Waukegan living trust attorneys explain why you may wish to consider using a living trust to facilitate your gift.

Options for Gifting

As with most gifts, there is more than one way to pay for your grandchild’s college expenses. You can, of course, simply wait until your grandchild is in college and pay the bills outright. Among the many disadvantages of using this method is the fact that there is no guarantee that you will be here when your grandchild enters college. Even if you are, the logistics of pouring through monthly bills for housing, tuition, books, food, and other related expenses and then arranging to pay them can be cumbersome. You could also gift the funds to your grandchild in your Last Will and Testament; however, that presents the opposite problem. If you are still alive when your child starts college a gift in your Will does not good. In addition, a gift made in your Will becomes the sole property of the beneficiary to do with as he/she chooses once the gift is made, meaning your grandchild is in no way obligated to use the funds for education expenses. For many grandparents, a living trust is the best method to use if the goal is to pay for college expenses.

What Is a Living Trust?

A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, also called a Maker or a Grantor, who transfers property to a Trustee. The Trustee holds that property for the trust beneficiaries. The beneficiary of a trust can be an individual, an entity (such as a charity or political organization), or even the family pet. A trust must have at least one beneficiary but may have an unlimited number of beneficiaries. A trust may have both current and future beneficiaries. If the trust is a testamentary trust, it means the trust will not activate until the Settlor’s death. If the trust is a living trust, the trust becomes active as soon as all formalities of creation are in place. Living trusts can be further divided into revocable and irrevocable living trusts.

Why Is a Living Trust a Better Choice for Paying College Expenses?

A living trust is an excellent estate planning tool if your goal is to gift assets sufficient to cover the college expenses of your grandchild, or grandchildren. Just a few of the reasons why include:

  • You choose the Trustee. The Trustee is responsible for managing and investing the trust assets as well as administering the trust. As the Settlor, you appoint the Trustee which means you decide who will protect the trust assets and handle the distribution of those assets when the time comes.
  • You control how the assets are used. Unlike gifts made in a Will, you maintain a significant degree of control over how the assets in a trust are used through the trust terms you create. In this case, those terms can require the assets only be used for college expenses.
  • Other family members can contribute. Often, more than one family member wishes to contribute to the same overall cause. A living trust allows multiple family members to contribute while only needing to create and administer one trust.
  • There may be tax benefits. If tax avoidance is a concern of yours within your estate plan, you may also gain tax benefits out of the trust you create. For example, you could make use of the yearly exemption that allows you to make gifts valued at up to the current limit ($15,000 as of 2019) to as many beneficiaries as you wish each year tax-free. Gifts you make using the exclusion do not count toward your lifetime exemption for federal gift and estate tax purposes

Contact Waukegan Living Trust Attorneys

Please join us for an upcoming FREE estate planning seminar. If you have additional questions or concerns about using a living trust to help pay for your grandchildren’s college expenses, contact the experienced Waukegan living trust attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.

  • Author
  • Recent Posts
Dean R. Hedeker
Dean R. Hedeker
Dean Hedeker is a leading Chicago-area authority on estate and tax planning, business law and investments. A long-time resident of north suburban Lincolnshire, Dean has more than 35-years experience helping business owners and families grow, protect and pass on their hard-earned money through tax planning, estate planning and investment management services.
Dean R. Hedeker
Latest posts by Dean R. Hedeker (see all)
  • How Can I Terminate a Living Trust? - September 24, 2019
  • Is an AB Trust Right for My Estate Plan? - September 12, 2019
  • How Can I Include Philanthropy in My Estate Plan? - September 4, 2019

Other Articles You May Find Useful

successor Trustee
Who Should Be Designated as the Successor Trustee for My Revocable Living Trust
Lincolnshire living trust attorneys
Why Should I Use a Living Trust to Distribute My Estate?
What are living trusts used for
What Are Living Trusts Used For?
What are living trusts used for
What Are Living Trusts Used For?

Primary Sidebar

FREE ESTATE PLANNING WORKSHEET

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.
  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • twitter
  • link
  • youtube

Testimonials

Raymond
Client Review
September 8, 2020
    

Dean's knowledge is very comprehensive and current. He not only sees and understands the particular question but he puts it in the context my particular matter and to the overall business and tax environment. Dean has been my attorney for many (over 20) years. I am also an attorney but I would never make a tax, business or financial decision without his extraordinary advice and counsel.

default image
Raymond

Where We Are

LINCOLNSHIRE
1 Overlook Point, Suite 610,
Lincolnshire, IL 60069
Phone: (847) 913-5415

See Larger Map Get Directions

Blog Subscription

  • This field is for validation purposes and should be left unchanged.

Office Hours

Monday8:00 AM - 5:00 PM
Tuesday8:00 AM - 5:00 PM
Wednesday8:00 AM - 5:00 PM
Thursday8:00 AM - 5:00 PM
Friday8:00 AM - 5:00 PM

Map

hedeker_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Privacy Policy
  • Disclaimer
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • twitter
  • link
  • youtube
footer-logo

Hedeker Law Ltd.
All Right Reseved.

Attorney Advertisement

© 2021 American Academy of Estate Planning Attorneys, Inc.