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Best way to give $ to a newborn?
04-08-2014, 09:26 PM
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#1
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Full time employment: Posting here.
Join Date: Jul 2013
Location: San Diego
Posts: 712
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Best way to give $ to a newborn?
What's the best way to give a gift to a newborn to kick off a college fund? The parents don't have much money and the granddad is kind of a conman. We'd like to kick in a grand or so, but we'd like to see it go into savings rather than one of grandpa's money making schemes.
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04-08-2014, 09:31 PM
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#2
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Recycles dryer sheets
Join Date: Feb 2010
Posts: 293
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529 plan.
Utma/ugma with you as the administrator, contribute up to gift allowance without tax.
Two options for you...
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FIREd at 46, 8/31/11
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04-09-2014, 03:51 PM
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#3
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Recycles dryer sheets
Join Date: Dec 2011
Location: Chicago area
Posts: 431
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Look in to how colleges account for the different account types when determining financial need. It could make a big difference when they turn 18.
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04-09-2014, 03:56 PM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2007
Location: Independence
Posts: 7,298
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For a newborn dimes are better than quarters - easier to swallow.
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04-09-2014, 03:58 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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 Quote:
Originally Posted by calmloki
For a newborn dimes are better than quarters - easier to swallow.
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And to pass...
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Numbers is hard
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04-09-2014, 05:40 PM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 7,113
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When we lived in WA we established college accounts for each grandchild there. The way it works is that you buy a credit unit at today's prices and they pay out at the $ a credit is worth when the brilliant  grandchild needs it.
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Duck bjorn.
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04-09-2014, 06:03 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 4,373
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I asked this a while back, and for me the best option was a 529 plan. I even get to take a state tax deduction for the contribution, check your state's rules.
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The problem isn't artificial intelligence, it's natural stupidity.
You can't spend yourself to prosperity.
Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
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04-09-2014, 06:50 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jan 2011
Location: Fair Lawn
Posts: 2,962
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I bought an I Bond for my newborn grandson
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04-09-2014, 07:03 PM
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#9
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Recycles dryer sheets
Join Date: Jun 2010
Location: Southwest Florida
Posts: 470
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Quote:
Originally Posted by mystang52
I bought an I Bond for my newborn grandson
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This doesn't work well anymore. The child would have to have an account with Treasury Direct because paper bonds are no longer issued.
Bruce
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04-09-2014, 07:04 PM
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#10
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Recycles dryer sheets
Join Date: Jun 2010
Location: Southwest Florida
Posts: 470
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Quote:
Originally Posted by REattempt
529 plan.
Utma/ugma with you as the administrator, contribute up to gift allowance without tax.
Two options for you...
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Giving a gift under UGMA and acting as the custodian yourself doesn't remove the gift from the donor's estate. 529 plan is a better alternative.
Bruce
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04-09-2014, 07:34 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jan 2011
Location: Fair Lawn
Posts: 2,962
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Quote:
Originally Posted by MBMiner
This doesn't work well anymore. The child would have to have an account with Treasury Direct because paper bonds are no longer issued.
Bruce
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Incorrect. The child does have to have a Social Security number, which per my son is now done automatically. In any event, it took about two weeks. Then, I went into MY Treasury Direct account and bought the gift bond. The record is on my account, but my grandson (with his SS #) is the owner of the bond. My son has a record of the purchase as well.
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04-09-2014, 07:43 PM
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#12
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Recycles dryer sheets
Join Date: Jun 2010
Location: Southwest Florida
Posts: 470
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Quote:
Originally Posted by mystang52
Incorrect. The child does have to have a Social Security number, which per my son is now done automatically. In any event, it took about two weeks. Then, I went into MY Treasury Direct account and bought the gift bond. The record is on my account, but my grandson (with his SS #) is the owner of the bond. My son has a record of the purchase as well.
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I guess I didn't state it clearly. There is no way anymore to give a paper bond and neither the child nor the parent have a record of the gift. The "electronic" bond is held in the donor's account which can only be accessed by the donor. Not the most satisfactory arrangement for making a gift.
Bruce
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04-09-2014, 08:59 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Jan 2011
Location: Fair Lawn
Posts: 2,962
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Quote:
Originally Posted by MBMiner
I guess I didn't state it clearly. There is no way anymore to give a paper bond and neither the child nor the parent have a record of the gift. The "electronic" bond is held in the donor's account which can only be accessed by the donor. Not the most satisfactory arrangement for making a gift.
Bruce
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Yah, from that perspective I agree, especially as a gift to a non-family member.
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