Estate planning involves using legal experience and expertise to make sure that your wishes become a reality, but there is some planning that needs to be done before this is accomplished. Formulation of those wishes is not something that generally happens overnight, and depending on the size and scope of your estate and the individual characteristics of the people that you want to include it can take a good bit of thought on your part.
Educational gifts are definitely something to take into consideration. In order to be relevant in today’s highly competitive job market you need the knowledge and skills that are currently in demand, and the better educated you are the more you will stand out from the crowd. The cost of higher learning at prestigious institutions is steep, however, and specialized courses of study are time intensive, making it hard to hold a part time job to earn the money that you need to meet your expenses.
You are allowed to give educational gifts of any amount to as many people as you want to free of the gift tax, so these types of gifts can provide you with a dual utility. For one thing you are making it possible for your heirs to get a good education while providing them with an added incentive to do so. In addition, you reduce the overall value of your estate and this can be a goal if the total value of your assets exceeds the estate tax exclusion amount.
The non-taxable educational gift must be paid directly to the institution and it can only be for the tuition amount. However, each individual may make gifts of up to $13,000 per year to as many people as they want to as well, so between you and your spouse you could bestow a $26,000 gift to a person or people of your choosing. You could make such a gift to your heirs to cover their expenses, providing them with a traversable path toward obtaining the credentials that they need to embark on successful careers in their own right.