It’s “Back to School” time, and I recently moved my youngest daughter into her freshman college dorm. As I navigate the challenge of funding a college education, I find myself wondering how I would have advised my younger self 18 years ago.


My first piece of advice as a parent and a financial advisor: Time is a best friend to anyone saving for college! According to the Education Data Initiative, the average cost of college tuition is $35,551 per student per year, which also encompasses tuition, supplies and daily living expenses.  That’s nearly $150,000 for four years, and that price is going up every year.


Educational funding is a topic we address often with our clients.  I stress to parents and grandparents that today is the best day to start saving for the children in their lives. By making investments as early as possible, it gives the money time to compound and grow over the long term.


What is the best way to save?  529 plans are the most popular savings vehicle and something you should consider as a parent or grandparent.  Money contributed to a 529 grows tax free and remains tax free if it is spent on qualified expenses.  Those include tuition and fees, books and supplies, computers, software and internet access, and room and board.


An account can be established in the name of a future student – called a “beneficiary” – and then anyone can make a gift to that account – parents, grandparent, aunts, uncles, or friends. Birthday gifts of toys and games for kids are fun, but investments in their future in the form of gifts to a college fund will reward them for a lifetime.


You can contribute up to $16,000 per beneficiary in 2022.  This means that if you and your spouse have two grandchildren, you can contribute $64,000 without gift tax consequences, since each child will receive $16,000 from you and $16,000 from your spouse.  You can also make a 5-year election and contribute $80,000 per beneficiary.  The five-year election must be reported on a Form 709 for each of the five years.  This is a great estate tax planning strategy because the funds you gift will remain outside of your estate and the custodian will maintain control of the funds in the 529.


Another advantage is that the funds from the 529 can be used for college, trade school, graduate school, and certificate programs.  Having this flexibility is a nice feature especially if your child decides not to go to college.  Families can also use up to $10,000 per year to cover elementary, middle school and high school costs. There are no age restrictions on when you can use the account to pay for college expenses and the beneficiary can be changed to another member of the family without any penalties.


Coverdell Education Saving Accounts, Education Trusts, UGMA/ UTMA accounts and ROTH IRA’s are other common savings vehicle.  Some states offer pre-paid tuition plans and for Florida residents, the Bright Futures Scholarship can provide substantial savings. If you would like to discuss ways you can help the students in your life, we would be happy to assist. Contact us at or 239.472.8300.


The Sanibel Captiva Trust Company is an independent trust company with more than $3.6 billion in assets under management that provides family office and wealth management services, including investment management, trust administration and financial counsel to high-net-worth individuals, families, businesses, foundations and endowments. Founded in 2001 as a state-chartered independent trust company, the firm is focused on wealth management services that are absolute-return oriented and performance driven. Each portfolio is separately managed and customized specifically to the client’s yield and cash-flow requirements. The Naples Trust Company and The Tampa Bay Trust Company are divisions of The Sanibel Captiva Trust Company. Offices in Sanibel-Captiva, Naples, Marco Island, Tampa, Belleair Bluffs and Tarpon Springs.