One of the best ways is to establish and contribute to a qualified 529 plan. Contributions grow tax-free; distributions to the student for education expenses are also free of federal tax, and in general, state tax, as well.
If you want to benefit more than one child and don’t wish to establish multiple 529 plan accounts, consider an education unitrust—a charitable remainder trust from which funds can be transferred to the trust tax-free. You or your trustee control how the funds are invested and you can also stipulate who can receive funds from the trust and under what conditions.
After the trust has completed all your primary objectives, any remaining funds go to a charity.
With this plan, you can save taxes, benefit your family and continue your legacy with your favorite 501(c)(3) nonprofit organization.
Check with your tax advisor or call or email us to see how education planning can benefit you and your family — and help create your legacy.