Eight ways to invest for your children

The benefits of investing for children are too great to be dissuaded by complex tax rules. Here’s a guide.

Summary: Children can usually receive and invest up to $10,000 in gifts tax free and can earn up to $20,000 tax free, but beyond that their tax rates are excessive. There are no meaningful tax breaks for putting away money to be spent on education, but young families might consider paying down their mortgage faster to free up funds to pay for school fees. Avoid picking underperforming stocks by choosing an exchange-traded fund as your child’s first investment.

Key take out: Sadly, the best way to invest for children requires you to die. Consider taking advantage of a Testamentary Trust to pass on assets to children and grandchildren.

Key beneficiaries: General investors. Category: Strategy.

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