Most people who have achieved a modicum of success are well aware of the value of education. When you are considering the broader implications of your legacy making educational opportunities available to your family members may be very important to you. Leaving behind inheritances is one thing, but paving the way for individual achievement may be a far greater gift.
If you agree with the above you may want to consider contributing into a 529 educational savings plan. These are state plans that enable individuals to put aside financial resources earmarked to pay for the education of a beneficiary.
With the 529 savings plan you make contributions over a period of time which are invested in an effort to gain appreciation. One of the tax advantages lies in the fact that any appreciation would not be subject to taxation.
In addition, the eventual withdrawal for educational purposes by the beneficiary is not considered to be taxable income. And if you pass away before the resources have been distributed they are not considered to be a part of your estate for tax purposes.
The other type of 529 plan is a prepayment plan. Either in a lump sum or incrementally you contribute into the plan to pay for future tuition in advance. Though these contributions do not grow for your purposes, what you get is a locked-in tuition rate and as we all know tuition expenses always seem to be rising.
529 educational savings plans may be a good fit for you if you would like to provide educational opportunities to loved ones. To explore this and other options, simply take a moment to arrange for a consultation with a good Indianapolis financial planning lawyer.
Your attorney will gain an understanding of your objectives, evaluate your resources, and provide you with personalized guidance.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
Latest posts by Paul A. Kraft, Estate Planning Attorney (see all)
- Is Your Power of Attorney Powerless? What to Do When a Third Party Won’t Honor an Agent’s Authority - September 11, 2019
- Are There Different Types of Special Needs Trusts? - September 4, 2019
- How Much Might I Receive in Veterans Aid & Attendance Benefits? - August 29, 2019