I think this is a very loving thing to do. Just make sure you do it right and you understand all the implications -- particularly the implications to college financial aid.

You'd probably want to create some sort of account to defer the taxes. My grandmother or grandparents created for me an UGMA. I created 529s for our kids.

A 529 is for post-HS education. It grows tax free and can be used tax free on educational expenses. And, you can remain the owner, with each kid a beneficiary. If they don't spend it all on college, the beneficiary-ship can be moved around. Or, unqualified withdrawals can be made, paying taxes plus a 10% penalty tax on the growth. Scholarship offsets can be withdrawn penalty free but not tax free. My first two kids got partial scholarships, and we were able to take money out of their 529s penalty-free (but not tax free) up to the amount of the scholarship earned in that calendar year.

And UGMA or UTMA would be owned by the child but administered by you until they reach the age of majority in yoru (or their) state. My understanding is that for financial aid purposes, this would count as their asset and under current rules would significantly lower how much aid they're eligible for.

Back in the dark ages when Reagan was president and I was in college, I didn't even know about the UGMA my grandparents had created. I don't know whether it was just grandma or both -- my grandfather died youngish of cancer, and my parents split book-ended his illness. Anyway, mom worked at the University, so my parents were able to pay 100% of my cost to attend. So I didn't even learn of the UGMA for another 10 years -- in Clinton's second term I think.