Wise Valentine Gifts for Grandchildren

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As a grandparent, you can love without the heavy responsibility of parenting. Giving gifts is just a part of having grandchildren. However, only wise gifting can help them grow a sagacious character for themselves. When your hard-earned money falls into careless hands, it is easily lost. Instead, help your grandchildren see the value of your gifts. Consider how to give wise Valentine gifts for your grandchildren this year.

Wise Gifts

Valentine’s day is approaching and without the expectations of the holiday season. It is easier to give an unexpected gift to your family members for Valentine’s Day. Often, grandparents choose to give money. It is difficult to know what a grandchild really wants or even what they sometimes need, though. Money is a sensible choice for grandchildren.

However, consider opening a trust if you’re thinking about giving a sizeable monetary gift that you would like to last for years. Trust agreement documents give you a level of control over how the trustee distributes your funds. Trusts can limit the category of spending to funds for educational, medical, or rent and utility expenses. You may also draw up a trust with your attorney that limits when a grandchild receives money. 

Perhaps they receive a lump sum each year on their birthday, or a meted sum each month for the next five years. Trusts are a legal framework that hold funds in an account. The trustee only distributes the funds to the beneficiaries named in the trust– and only for the reasons and times specified in your trust agreement.

There are many types of trusts that your attorney may help you open. A trust allows you to give year after year effortlessly. And they make it possible to help your grandchildren succeed without throwing a life-distracting windfall in their direction all at once. 

Generation-Skipping Transfer Tax

Direct transfers of money to grandchildren may be subject to the generation-skipping transfer (GST) tax, levied in addition to estate and gift taxes. Asset protection strategies reduce the tax your estate will pay when you pass on. Without proper planning, taxes will take a large chunk of the money you have saved. Creating trusts now can protect your assets for years to come.

Generation-Skipping Trust (GST)

GST taxes are the reason GST trusts exist. In addition to reducing your estate taxes, GST trusts can also give you the ability to control how and when the money is distributed. More control means helping grandchildren who may need to buy a home or get married. 

According to Investopedia “A generation-skipping trust (GST) is a type of legally binding trust agreement in which the contributed assets are passed down to the grantor’s grandchildren, thus “skipping” the next generation, the grantor’s children. By passing over the grantor’s children, the assets avoid the estate taxes—taxes on an individual’s property upon his or her death—that would apply if the children directly inherited them.”  Read more about these types of trusts here at Investopedia: Generation-Skipping Trust—GST Definition  

Educational Trusts

Another way to gain control of wild spending is by giving money designated for a grandchild’s education. You can put in up to $15,000 each year (married couple $30,000) without gift tax penalties.. An NC 529 plan can keep funds ready for the day when a child heads off to college. You can find more information on these plans at NC 529 Plan  


Custodial Trusts Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) accounts are also beneficial choices for giving $15,000 per year ($30,000 if married) safe from gift taxes. These are custodian-held accounts that are given to grandchildren at the time or situation specified by you. UGMA & UTMA are not tax-deductible but are a way to reduce your total estate tax load. 

Credit Shelter Trusts 

A credit shelter trust is “designed to allow affluent couples to reduce or completely avoid estate taxes when passing assets on to heirs, typically the couple’s children. … And upon the surviving spouse’s death, the trust’s assets are transferred to the remaining beneficiaries without any estate taxes levied.”  (1)  Bypassing the other spouse’s estate allows each spouse’s federal estate tax exclusion amount to be used for the grandchildren. 

Irrevocable Life Insurance Trusts (ILITs) 

If you purchase life insurance policies for your grandchildren, this is another way that you can keep the money you are giving out of probate and immediately provide for your heirs after your death. 

Special Needs or Disability Trusts

A special needs trust may help a child who receives government benefits to not lose those benefits when you give them a large sum of money. Any money they own personally may count against their income limits to receive Social Security disability benefits, health insurance, or transportation. 

However, with money in a trust set aside specifically for their needs, you can give a small amount at specific times to supplement their meager income. Discussing with your grandchild or their parents and an attorney first can help you create a trust that will help meet their needs in the future. 

You Have Many Options

Whether you choose to open a trust and appoint a friend acting as trustee or develop a board of trustees to mete out the money, planning ahead can help you make the best decisions. Some trusts even allow the trustee to give trust funds as needed to all of your grandchildren using their own discretion. Other trusts are tailored to each individual child. Your options are many and varied and depend on what you would like to leave for each grandchild. 

We Can Help

At Vail Gardner Law, we help you maximize your assets and protect them for future generations. With the best legal planning tools, you can avoid taxes, help your grandchildren (and children), and ensure that your wealth is spent as you would choose. If you’d like to discuss the possibility of opening a trust for a grandchild, contact us today. We work with you from our experience to create a trust that meets your needs and the needs of your family members. 

Get in touch today and find out how we can help you and your family enjoy Valentine’s Day 2022 for years to come.  Give your grandchildren the gift of knowing how much they are loved this year. With a foundation built on your expression of love, you give them strong wings to soar into their future.



  1. https://www.investopedia.com/terms/g/generation-skippingtrust.asp