Well, thanks for the compliment. Let me point out a few things that you might not want to hear. When you say you are concerned about the “5-year lookback” you are talking about getting money out of your name so that you can qualify for state-paid custodial care in your old age. That’s the Medicaid program. And with all due respect to the people who work there, it probably shouldn’t be your first choice for care! The Medicaid program will only become more underfunded. And assuming you will need some kind of care, wouldn’t you like to receive it in a more cheerful, private pay facility?
OK, if you still wan to gift money to your grandchildren, and if you want to have it used for their college education, the easiest way is to open a 529 College Savings plan account. But you’d likely need to name their parents as custodians. The money grows tax-free and can be used to pay for most college exenses when they arrive. To learn more go to www.SavingforCollege.com.
Your only other choice is to set up a trust. For that you’d need an estate planning attorney. And since the children are minors, you would have to name a trustee to follow your instructions regarding eventual distributions. This is a costly project and again you would have to find a trustee to handle this money when you pass on. I’m assuming you don’t trust the parents of those children, but do you trust someone else??
In either case its a good idea to see a professional estate planning attorney in your state of residence to work on these issues. You can start your search at www.Findlaw.com.