FOR YOUR CHILD
From education to a financial head start,
help give your child more room to choose.
KNOW YOUR OPTIONS
A college fund, a gift your child will own, and a life insurance policy do different jobs. Start with what you want the money to do.
Designed for education
A way to set money aside for education expenses. Earnings can qualify for federal income tax benefits when used for eligible expenses.
Nonqualified withdrawals may trigger income tax and an additional tax on earnings. Review exceptions, state rules, and fees. Investment-based plans can lose value.
Assets that belong to your child
An adult manages money or assets given to a child until the applicable transfer age. Funds can be used for the child’s benefit beyond education.
Gifts generally cannot be taken back. Control passes to the child at the age required by state law. Review the tax treatment and potential financial aid impact.
A head start with earned income
A retirement account worth exploring when a child has qualifying earned income. An adult can manage a custodial account while the child is a minor. Qualified withdrawals receive favorable tax treatment.
An allowance alone does not create eligibility. Contributions depend on qualifying compensation, annual limits, and income rules. Withdrawals of earnings have additional requirements.
Coverage with long-term cash value
Permanent life insurance, such as whole life or indexed universal life, combines a death benefit with cash value. Consider it in the context of a long-term insurance need and premiums you can maintain.
This is insurance, not a savings account. Review policy costs, surrender charges, and guaranteed versus nonguaranteed values. Loans accrue interest and can affect coverage; a lapse with an outstanding loan may have tax consequences.
General information, not an individual recommendation. Account purposes and tax treatment differ. Reviewed October 2, 2026.
START WITH YOUR GOAL
Tuition in a few years and a financial head start in adulthood call for different timelines and different levels of risk.
Money you manage as a parent is different from an irrevocable gift to your child. Ownership and access matter.
Consider a sustainable monthly amount and whether you might need the money sooner. Keep your own emergency savings and retirement in view.
COLLEGE FUNDING
How an account is owned and structured may affect how it is treated in a financial aid review. The right questions depend on your family’s situation and the aid program.
Lilly handles life insurance conversations directly and works with specialists for detailed financial aid reviews. Individual investment and tax advice should come from the appropriately qualified professional.
QUESTIONS YOU MAY HAVE
Start with your child’s expected college timeline, what you have saved, and a monthly amount you can sustain. Include housing and living expenses alongside tuition. Those details help frame a plan that also considers your family’s current needs and your retirement.
I work with specialists on the detailed financial aid review. I help clarify your family’s questions and connect you with the appropriate expertise. Tax issues are reviewed by the relevant professional. A conversation does not establish eligibility for aid or guarantee an award.
I used to put off saving until there was a little more room in the budget, too. The first question is whether an amount fits your life and is something you can keep up with. We can look at what comes in, what goes out, and a starting point that feels manageable.
It can feel like you have to choose one or the other. Start by looking at both timelines: when your child will need the money, when you hope to retire, and what you already have in place. The goal is to set priorities that work for the whole family.
Absolutely. You do not need to start something new to have a useful conversation. Tell me what you are saving for and when you expect to use the money. We can start by understanding what you already have.
YOUR NEXT CHAPTER
Start with what matters most to you right now.
20 minutes · On Zoom · No cost
