KNOXVILLE (WATE) – More and more couples whose children are grown and may have grandchildren are deciding it is better to give away some of their money while they are living.
Denise in Loudon asks: “My husband and I are considering giving some assets to our children or grandchildren. Do you have any suggestions?”
A recent survey has found that giving to your children while you are still around is a lot more satisfying than leaving instructions spelled out in a will to be followed after the funeral service.
A poll by UBS Wealth Management Americas shows that 60 percent of parents would rather give to their children and grandchildren while they’re still alive to watch them spend it.
For example, a 529 college savings account, an education savings plan operated by a state or educational institution, is designed to help families set aside funds for future college costs.
These popular college savings plans can remain under a grandparent’s control. You can switch the beneficiary between grandchildren or children, if they decided to go back to school later in life.
Another popular way for parents to help their grown children is through a pledged asset mortgage. Financial experts say these work well when adult children have a good income, but not enough money to cover a down payment.
Under some of these agreements, the pledge may only be given by a parent, grandparent, brother or sister to an eligible borrower.
There is, however, a drawback to pledged asset mortgages. If the owner of the home defaults, the person who makes the pledge will lose the pledge money.
You can see Don Dare’s 6 On Your Side Answers every Tuesday and Thursday on 6 News at 4:00. If you have a question you can send Don an email at email@example.com or call his 6 On Your Side hotline at (865) 633-5974.