If you have kids or grandkids who earned some money this summer or who might in the future, this Brief is for you. I actually got the idea from a client of ours who has been doing this for her grandchildren for several years, splitting her $14k allowable gift for each child between a Roth IRA account (when the grandkids have some earned income) and a more traditional brokerage account (e.g. an UTMA account if the kid is under age 18) if not. It’s a great idea so I wanted to share it with all of you. Please get in touch if you have any questions.
P.S. The above is still relevant if the “kid” is a working grownup receiving annual gifts from parents for estate planning purposes.