Grandparents more often than not, would like to gift money or assets to the grandchildren, while still living. There are several methods that can be used including money and giving to a 529 Plan. By making the transaction a gift, you can qualify for a tax deduction.

Giving to the grandchildren can bring delight to you and them. The children will rejoice, when they find out, grandma and grandpa were thinking about them. You may decide to give them a small gift, or some shares of Disney stock for Christmas. Giving money to fund their college education is another option.

Right now, you can give a gift of $11,000, a year, without incurring any gift taxes. This is a great way for grandparents to get money out of their estate. They may choose to right at check on the grandchildren's' birthday or around the holidays, but make sure you have written evidence of the gift. By doing so, the gift is tax deductible in that given year.

The 529 Plan can also be used by grandparents as a gifting option. You can make a one time gift, good for five years. Therefore you can donate $55,000 a piece, this year and avoid the gift tax.

Gifting to the grandchildren should be out of love. However there are some tax benefits by gifting. A important thing to remind yourself of; would not money be better in the hands of my family or possibly the state.

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