In 2026 you can give up to $19,000 per person to as many people as you like, with no gift tax and no return to file. Your spouse can give the same amount, so together you could give a child $38,000 in a year. If you go over, you file a gift tax return, but in most cases you still owe nothing, because the excess is subtracted from a lifetime exemption of $15 million per person for 2026. The person receiving the gift generally does not owe federal income tax on it. Maryland has no gift tax of its own. These numbers change and some gifts follow special rules, so confirm the details with your tax professional before making a large gift.

Many families do some of each. Giving now lets you see the money used, and it can reach your children in the years when a mortgage and child care take most of a paycheck. The tax rules pull the other way for some assets. Shares you give away keep your original cost basis, so the person who sells them may owe tax on your gain, but assets left at death generally receive a new cost basis as of that date. For that reason some people give cash and hold on to investments with large gains. Your tax professional can tell you whether that fits your situation.

For money that is clearly meant for education, many families start with a 529 plan. Earnings are not taxed while they stay in the account, withdrawals for qualified education expenses are free of federal income tax, the adult stays in control, and a parent-owned account counts less in federal aid formulas. The trade-off is that earnings spent on anything else are taxed and generally penalized, and your investment choices are limited to the plan's menu. A custodial account makes sense when you want the money available for anything that benefits the child, or when you are giving something a 529 cannot hold, such as shares of stock. In return you accept tax on the income each year and a larger effect on aid, and in Maryland the child takes full control at 21. Either account carries fees and investment risk.

Yes, for contributions to Maryland's own 529 plan. A Maryland taxpayer who owns an account or contributes to one can generally subtract up to $2,500 per beneficiary per year from Maryland income, and contributions above that carry forward for up to ten years. Two parents who each contribute for the same child can each take the subtraction, and so can grandparents who pay Maryland income tax. There are conditions. You cannot take it in a year the state adds money to your account through its Save4College program, and money withdrawn later for non-qualified purposes may have Maryland tax consequences. If you live in another state, your home state's plan may come with its own benefit, so we compare before you choose.

You have more choices than families did a few years ago. Under current federal law you can change the beneficiary to another qualifying family member, such as a brother, a sister, or a first cousin. The money can pay for trade school, a registered apprenticeship, or up to $10,000 of the beneficiary's student loans. Up to $35,000 over the beneficiary's lifetime can also be moved into a Roth IRA in their name. The 529 has to have been open at least 15 years, each year's transfer is capped at the annual Roth contribution limit, and other conditions apply. Failing all of that, you can withdraw the money and pay income tax plus a 10% federal penalty on the earnings portion. State tax treatment varies, and a state may take back deductions it gave you earlier.

Generally yes, once the child has earned income from a job or from self-employment such as babysitting or mowing lawns. An allowance does not count. The account is opened and managed by an adult custodian, usually a parent, and contributions for 2026 are limited to what the child earned, up to $7,500. The money itself can come from you. It is worth keeping records of what the child earned, especially for cash jobs.

It depends on the account. Under the current federal formula, a 529 plan owned by a parent is counted as a parent asset and assessed at no more than 5.64% of its value. A custodial account belongs to the student and is assessed at 20%. A 529 owned by a grandparent is not reported on the FAFSA, and since the 2024-25 award year withdrawals from it are no longer counted as the student's income. Some private colleges use a second form, the CSS Profile, that can ask about accounts the FAFSA leaves out. The formulas change, so we check the current rules as the first application gets close, and the school's aid office has the final word.

Start with your parent's own resources: Social Security, any pension, savings, home equity, and any long-term care insurance. Then settle what the family will add and how it is divided, ideally before a hospital stay forces the question. If you do pay, pay the care provider directly, which keeps qualifying medical expenses outside the gift tax rules. Be careful about moving a parent's assets. In Maryland and most other states, Medicaid reviews transfers made in the five years before an application for long-term care coverage, and gifts in that window can delay eligibility. The $19,000 gift tax exclusion offers no cover there, because Medicaid can count a gift of any size. This is a legal question, so we coordinate with the elder law attorney you choose.

Then the form of the gift matters a great deal. Programs such as Supplemental Security Income and Medicaid have strict asset limits, and a well-meant check written to your son or your sister can interrupt benefits they depend on. ABLE accounts and special needs trusts were created for this situation, and each has its own eligibility rules and limits. A special needs trust is a legal document and should be drafted by an attorney who handles them regularly. That attorney can also advise on how a gift affects benefits. We work on the financial side, which covers how much to set aside and where it is held.

You can start without moving anything. Many people begin with an introductory call about a single decision, such as a 529 for a new grandchild or a gift toward a house. Whether to move accounts is a question for later, if this turns into a longer relationship.

We start with a conversation. The introductory call is where we learn what you are trying to solve and tell you honestly whether we are a good fit. If we are not, we will say so.