My children are all grown with families of their own. Your idea to help pay for your grandson s college is wonderful. You will be giving a boost to your grandson, and be taking a burden off your children at the same time.
Tuition is a special exception.
You can make a tax free tuition gift for anyone, whether they are in your family or not. You cannot gift the money to your children or grandson expecting them to pay the school bills. If the funds are put in any hands other than the school, gift tax may be due. You cannot use this exception to shift money unless the school is a fully functioning educational institution. The money can only be for tuition.