Meaningful Ways Grandparents Can Support Their Grandchildren Financially

For many grandparents, money is more than dollars and cents. It’s a way to show love, pass on values, and help the next generation build a strong foundation. Whether your goal is to support education, encourage smart saving habits, or create a lasting legacy, there are many ways to make a meaningful impact.

Below are several practical strategies to support your grandchildren while staying aligned with your financial plan, tax considerations, and long-term goals.

• Annual Cash Gifts – Simple and flexible, cash gifts are a classic way to help out. In 2026, you can give up to $19,000 per person – or $38,000 as a married couple – without triggering gift-tax reporting. These gifts can help cover savings, activities, or just lighten the load for parents.

• 529 College Savings Plans – 529 plans are a powerful, flexible education savings tool offering tax-free growth and withdrawals for qualified expenses, including K-12 private school tuition and some homeschool costs. Wisconsin residents may qualify for a state income tax deduction of up to $5,280 in 2026. If plans change, funds can be transferred to another family member, and unused balances may be rolled into the beneficiary’s Roth IRA after 15 years. A bonus: grandparent-owned 529s also no longer impact FAFSA eligibility.

• Direct Tuition Payments – Paying tuition directly to a school is an often-overlooked strategy. These payments don’t count as taxable gifts and can make a big difference for families. It’s a great option for private school, college, or graduate programs – all without affecting your annual gifting limits.

• Custodial Accounts – Custodial accounts let you gift cash, stocks, or other assets while keeping control until your grandchild reaches the age of majority (21 in Wisconsin). They’re flexible, have no contribution limits, and can be used for any purpose – not just education. Because these accounts can affect a minor’s taxes, it’s worth talking with your advisor about the best way to structure them.

• “Trump Accounts” (Family Accumulation Accounts) – These accounts are getting a lot of attention. While some details are still being finalized, the idea is straightforward: families can contribute up to $5,000 per child per year in after-tax dollars, and the funds grow tax-deferred. Money can be used for education, a first home, starting a business, or simply left to grow for the long term.
• Estate Planning Considerations – If your own children are financially secure, you may want to include your grandchildren in your estate plan. There’s no one-size-fits-all approach here, but it can be a meaningful way to support future generations and leave a legacy that reflects your values.

Every family is different, and so is every financial plan. The right approach depends on your goals, your tax situation, and the values you want to pass along.