Smart Saving
Grandparents Build Smarter Kids
By: Jennifer Greacen of Red Frog
Marketing
While you may be a grandparent who
loves to shower your darlings with fun stuff, your generosity
could go much further if invested into a 529 plan for their
educations. Besides offering your namesake(s) the best future
possible, these gifts can actually benefit you tax free.
“Grandparents can invest up to $55,000
in one year or they can do up to $11,000 for 5 years without any
gift taxes. This allows them to give $44,000 more than they would
normally be allowed to give in a year”, says Andy Zorovich,
managing director of Infinity Financial Group in Largo. “The
benefit for estate planning is this account will not show up as
belonging to the grandparent. This means it will not be included
in their estate taxes. It will also be creditor proof, so if they
get sued, go into a nursing home, or have other creditors, this
will not be an asset.”
529 plans are completely controlled by
the owner with the child named as beneficiary. You can add or
change grandchildren or you can make yourself the beneficiary and
revoke the gift for any reason.
When the grandchild uses the money for
college tuition, room, board, books, or fees, the earnings will be
income tax free.
“Grandparents can set these up to
create an infinite education account that can be handed down the
generations on a tax free basis”, advises Zorovich, “It is a
fantastic way to leave something significant and beneficial
behind.”
Information
courtesy of Infinity Financial Group
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