Start a 529 plan for a relative
If managed well, a 529 plan can help the recipient meet higher education costs at qualified colleges throughout the country. It offers tax benefits to the plan holder, and some states include tax incentives for investors.
To open a 529 plan for college savings as your money gift, contact a financial adviser and ask about the options available for your situation. The adviser will help you start a 529 plan in the child's name. You can then give a one-time contribution or set it up to make continuous monthly contributions, Cargle says. Gift cards are often available upon opening an account. Ask your financial adviser for details.
If you're opening a 529 plan for a youngster, consider the gift to be a teaching moment. "Sit down and help them understand why this is being done," says Cargle. A conversation on the basics of saving and education, followed by regular contributions by the giver, can go a long way toward teaching the value of both.