More on charitable giving rather than more toys – Monterey Herald

Question: I really enjoyed your column last week on giving to charity for the holidays and letting your grandchildren know you made the donation and why. The reader had written that her grandchildren already had too many toys and that she wanted to give them something really meaningful for Christmas. Like you, when our grandchildren were born, we opened an account for each of them on the day of their birth. However, we wonder if Social Security will be there for them when they reach retirement age, so my wife and I wanted to make sure they had something saved. On the day of their birth, we made the then eligible donation of $ 14,000 into a well-diversified investment account for each grandchild and just let it “roll”. At an average annual rate of return of 6%, by the time the grandchild turns 60, everyone will have almost half a million dollars! Stock returns are, on average, above 6%, so we think they will have a lot more. No question just wanted to share.

Responnse: Well done! Excellent strategy. Parents often ask in this kind of situation whether they should share account information with the grandchild or keep it private. Sharing gives you a great opportunity to introduce your grandchild to investing and the power of compound interest. However, some grandchildren may want the money sooner and pressure parents or grandparents to give them the account before they turn 60. It’s a personal decision. Read on for more gift ideas provided by readers:

* We have a donor advised fund and we donate to it every year. When our grandchildren are around 10 years old, we start teaching them about annual DAF giving and think it is a great tool for them to learn how to research a charity to make sure it is well run. . It also allows them to give to causes they want to support. The Monterey County Community Foundation has been a huge help to us in the creation of the fund and the annual “education” of our grandchildren.

* My husband and I don’t have any extra money, so setting up accounts for the grandchildren is not an option. What we do is they volunteer with us when we do charitable work. A few years ago we worked on Thanksgiving serving food to the homeless. What’s really gratifying is that every Thanksgiving since, one or other of our now young adult grandchildren has been “absent” from the family Thanksgiving dinner because they volunteer. We couldn’t be prouder!

* Being a teacher all my life, I think the gift of reading is extremely important for children. Every year I give my grandchildren books for Christmas and we read them while their parents cook dinner. Then I make a point of asking the grandchildren to talk about the story over dinner. I think it teaches them to like books and also to be an interesting interlocutor at the table. They love tradition and we look forward to it every year.

* At Christmas, I give my grandchildren a coupon for “a day with grandmother”. When they cash their coupon, either I take them to a museum, show them how to plant a garden, how to knit or something new and fun. They enjoy it and gain knowledge or a new skill every year.

Thanks everyone for these wonderful ideas on how to give a life changing gift for your grandchildren!

Liza Horvath has over 30 years of estate planning and trust experience and is a Chartered Professional Trustee. Liza is currently President of Monterey Trust Management. This is not legal or tax advice. If you have a question, call (831) 646-5262 or email liza@montereytrust.com


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