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Dice Financial Services Group

1716 N. Sanborn Blvd, PO Box 790

Mitchell, SD 57301


Phone:     605-996-7171

Toll Free: 800-658-3603


Website: www.dicefinancial.com

November/December 2023

Want to Share Your Wealth with Grandkids?

Want to Share Your Wealth with Grandkids

When grandchildren are young, finding a cool toy or the latest electronics for them during the holidays is easy. But last year’s presents may be long forgotten when the next holiday rolls around. This year, consider giving grandkids gifts that will benefit them for many years. Your financial and tax professionals can help.

Annual Gifts
Wealthy grandparents can reduce their taxable estates by making annual gifts to grandchildren and others without paying gift taxes. For 2023, the annual gift tax exclusion allows you to give up to $17,000 per recipient — $34,000 if your spouse joins in the gift. Make sure you are confident that your grandchild will treat the gift responsibly before you gift a large sum.

Educational or Medical Costs
Beyond what the annual gift tax exclusion allows you to gift tax-free, you can give unlimited amounts to your grandchildren to pay for school tuition or medical expenses. The only catch is that you must pay the school or medical facility directly.

Life Insurance
Naming a grandchild as beneficiary of your life insurance policy provides tax-free benefits when you die.

Head Start on Retirement
If your grandchild has earned income, you can contribute up to that amount to a Roth IRA for your grandson or granddaughter. The annual contribution limit is $6,500. Withdrawals are tax-free at retirement, assuming qualifications have been met.

Custodial Accounts
Consider contributing to a custodial account for your grandchild. Under the Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA), up to $1,250 of earnings are tax-free, while the next $1,250 of earnings are taxed at the child’s tax rate. (Additional gains are taxed at the parent’s rate.)

However, there are downsides. Your grandchild’s ownership of the account could affect eligibility for financial aid. And your grandchild has full control of the funds at either age 18 or 21, depending on the state.


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Securities and investment advisory services offered through Osaic Wealth, Inc. member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Insurance Services offered through Dice Financial Services Group.
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