David Byrne, Savings and Investments Proposition Lead, Aviva Life & Pensions Ireland DAC

Following his recent announcement to retire, it's timely to consider a story that his former daughter-in-law, Mary Buffett, shared.
In 2009, Mary Buffett shared the gifts she would receive from the Oracle of Omaha.
"He (Buffett) would always give each of us $10,000 in hundred-dollar bills."
And she admitted that "as soon as we got home, we'd spend it!" That didn't go over well with a man with an estimated net worth of around $160 billion, more than the total GDP of oil-rich Kuwait.
After a year or two of this behaviour, Buffett's approach to gifts changed.
"Then, one Christmas, there was an envelope with a letter from him. Instead of cash, he'd given us $10,000 worth of shares in a company he'd recently bought, a trust Coca-Cola had."
In his letter, he said to either cash them in or keep them." Mary Buffett chose to keep the stock and bought more shares.
Is cash really king?
His decision to give financial gifts to his children and grandchildren that couldn't be readily squandered should give us all cause to rethink cash as a gift and gifts to family in general.
If you're thinking about your legacy (or gently nudging a family member to make a positive financial contribution), an investment product can be a valuable tool. Few gifts have the potential to be worth more in the future than they are today. That is one of the unique upsides to giving the gift of a specific savings and investment account for a grandchild. And opening an account is easier than you think.
Regular or large?
The type of investment vehicle you choose depends on the donors' circumstances, how much they have available to invest for the child in question, and if they want to open an account with a lump sum or make monthly contributions and build up a fund.
At Aviva, two great options tick both boxes.
Children's Savings Investment Trust (Regular Savings)
If the donor isn't fortunate enough to have a lump sum to gift, they can save up to €3,000 per year per child (or €6,000 per couple) using the Small Gift Exemption, which doesn't impact the child's lifetime Capital Acquisition Tax (‘CAT’) threshold from grandparents.
Contributions start at just €100 per month. Investment growth is not counted as a gift for tax purposes, and you can track the performance online2 . The fund is managed by the trustee until the child turns 18. This is a great option for grandparents who want to give a little each year in a tax-smart way.
Children's Investment Trust (Lump Sum Investment)
If a grandparent had an existing lump sum and wanted to invest it on their grandchild's behalf, a grandchild could receive up to €40,000 in gifts from all grandparents without paying CAT.Footnote [1] Gifts received from all Group B family members over €40,000 are subject to CAT at 33%. Footnote [1]
You can invest a lump sum using the lifetime CAT threshold, which allows larger gifts without an immediate charge to tax.
The Aviva Children's Investment Trust starts at just €10,000; investment growthFootnote [2] is not treated as an additional gift, and the trustees manage the funds until the child turns 18.
Encourage long-term thinking
Buffett is a long-term investor who believes it is more important to focus on the future potential of an investment rather than its short-term performance. This is a philosophy we mere mortals can apply to our investments because there are no shortcuts to building a solid financial foundation. Unless, of course, your father-in-law is one of the most successful investors in American history.
Talk to a broker and find the right solution for you
We'd encourage you to talk to one of the expert panel of brokers and ask them about Aviva Savings and Investments. You can find one of our brokers here.