Grandparents want to give mutual funds to grandchildren

[Darren Looker]

My parents have some mutual funds that they want to give to my 3 kids while the markets are down. All 3 children are minors. 
What is the best way to minimize taxes in this situation? Transfer or sell and buy back into the market? How are taxes calculated on dividends as the funds grow especially if I am the custodian and at a higher tax bracket than the kids?

[Carl Fischer]

@Darren Looker

No use a brokerage house for mutual funds- not a SDIRA company