Most efficient way for US based grandparents to give money to grandkids

winterhope

My late husband’s parents live in USA and they would like to give their grandchildren some money for the future.
Has anyone experienced this before and have any recommendations please? UK based financial advisors don’t seem to be able to help

Many thanks

Keep_pedalling

What sort of money are we talking about?

How old are the grand children?

silvercar

I’m assuming they must still be children, or the grandparents could liaise direct, the easiest would be for them to transfer the money to you, accompanied by a letter explaining it is for the grandchildren. You could open a junior ISA on their behalf.

tacpot12

Wise (Wise account: Multi-currency account | Foreign currency account) is a good service for sending money abroad.

From an tax-efficiency point of view, there is no real tax-efficiency issue. It will be for the grandparents to take financial advice in the USA, about gifting money to grandchildren (it is unlikely to matter where the children are located). And it is an issue for you if the children are minors as to how the money is invested for the future. Whether to invest in Stocks and Shares or save the money into a deposit account will depend on the children's age.

The usual advice is that investments need at least five years to be worthwhile. I would say that with the Stock Market doing well at the moment, you should think about extending this time horizon to seven years, so if the eldest child is already 11 years old, a Stocks and Shares investment is perhaps too risky (too much chance that the value of the investments will drop and not recover by the time they need the money).

If a Stocks and Shares investment does seem suitable, then have a look at a Junior Stocks and Shares ISAs. This will be the most tax efficient and simplest form of investment, although you will have to figure out what to invest in. There is lots of advice on the forum already, and generally the suggestion is a Multi-asset Global fund, such as Vanguard LifeStrategy 60.

What a nice problem to have!

Cubicsrube

Maybe the OP has resolved this, but if not, one more possibility: If the grandchildren are US citizens and have their SS numbers, they can have US 529 college savings accounts opened by the grandparents in their names. These are tax advantaged and can be used at educational institutions globally. My dual citizen kids domiciled in UK have 529 accounts in the US that we plan to use for college here.

Otherwise it would be a straight gift. Inheritance tax threshold is vastly higher in the US so tax at their end unlikely to be an issue (unless the gift is property or other capital asset - then, how the US calculates cap gains basis becomes relevant!). Agree with other posters that Wise is good value for large international cash transfers, we use it a lot.