I thinking about helping a family friend by paying his law school tuition and maybe give him a stipend for books and living expenses. Do I need to create a scholarship or grant to do this or can I just pay the institution and him directly? I am worried about the tax implications for him. Any advice would be helpful. Sorry this would be in the US and the Annual amount would be about $50k for tuition and the same for a stipend.
Short answer: no tax implications for the student, but perhaps for you.
Generally, money given to someone else is considered a gift. Above certain amounts, the donor may be subject to gift tax. Gifts are normally tax-free to the recipient.
However, amounts paid directly to an educational institution for someone's tuition are not subject to gift tax.
Amounts for books, room and board, personal expenses, etc. are considered a gift. For 2018, you can gift up to $15,000 (single) or $30,000 (married) without any gift tax consequences.
Now, in practice you won't pay gift tax on amounts above those thresholds either, because you can count it against your "lifetime exclusion", which is $5.6 million (single) or $11.2 million (married). However, you will need to file a gift tax return (Form 709) with your tax return, informing the IRS of the gift and that you are using some of your lifetime exclusion.