If your children are grown, it's likely that now, or before long, you'll have grandchildren. You can help your own children pay for your grandchildren's college fund by creating a custodial account and making periodic contributions to it. These gifts would be exempt from the gift tax as long as they were less than $10,000 annually, for each donating spouse. This means that a couple could donate up to $20,000 to their grandchildren's college fund each year and not be subject to the gift tax. Another consideration is the fair and equal division of the estate. Often parents, in an effort to be fair, simply divide their estate equally, but you may want to reconsider that if you have a special-needs child with limited earning potential. Furthermore, if you have a grown child you think is not mature enough to handle an inheritance at this stage in life, it might be wise to create a living trust that could periodically give portions or payments to the child over time. This could thereby prevent your assets from being depleted too rapidly and protect your child up until the time he or she is able to handle the full implications of inheriting a large sum.
