OP, have you read the Millionaire Next Door? How you choose to fund adult children can make or break them. You also need to make absolutely sure that you have enough assets for your own retirement and possible health issues before funding adult children.
Having said that, we did and do think that the best help we could do for our child was to provide good role modeling and step by step money management from a very young age as well as accumulate the means for a good education.
When DS was 1 (1994), we set up an irrevocable trust fund for him, primarily to fund college or trade education, but the trust document also allowed distribution for his "support or health" if need be. We chose the trust vehicle because we wanted to retain control (which eliminates UGMA) & keeping the assets in our names would subject it to the kiddie tax. 529's didn't exist but we'd still want more control. DS could elect to receive 50% of any residual trust funds upon graduation from a 4 year university or equivalent trade certification, then 25% of the original residual at age 30, and the balance at age 35, but he is not required to (this has later advantages). We funded it annually with an amount less than the annual gift tax limit. We chose indexed funds to invest in for tax friendliness. We are the trustees, but have named an investment bank as trustee if/when we die.
When DS was applying to university, we told him that any costs he could save, such as scholarships and/or graduating on time, would stay in the trust and ultimately be his. He was awarded substantial merit scholarships so we were able to cash flow his remaining expenses without touching the trust. Since the trust cannot be attached by creditors or a divorce settlement, DS will not need a prenup if/when he marries. He can use the trust for a house, start a business, or let it accumulate as an education fund if he has children.
When DS started working during his HS summers, we matched his earnings to contribute to a Roth we helped him open. When he worked as a engineering intern during college summers, we encouraged him to fully fund his Roth himself (we no longer needed to match it). He is now fully employed as an applications engineer, fully funds his Roth as well as his employer's 401K & HSA, & is debt free. We are very proud of the independent young man he has grown to be!
We have a nephew who received UGMA stock from his grandparents intended for his education, at least $100,000. He tried community college but didn't have a solid goal and failed at it. He's now 27, still lives with his parents, & has never held a real job -- I can't help but think that his stash has been counter productive.
