As a grandparent, one of the most prominent goals that you have for the future is ensuring that your loved ones have what they need for stability and security in the future. One important way you can do this is by establishing financial plans and legal protections that ensure your wealth stays in the family and that there is appropriate use of your assets after you pass. For many Louisiana grandparents, they want to set aside funds for their grandchild’s college education.
There are different ways you can set aside and designate assets for a specific use, both during and after your lifetime. If your goal is to ensure that your grandchild has the financial resources to pay for his or her higher education, one effective way to do that is through a 529 savings plan. You will benefit from understanding how this type of plan works and how it could help you accomplish your estate planning goals.
The benefits of this type of plan
A 529 has long been a popular option for those looking to establish savings specifically for the purpose of paying for education. However, there have been recent changes to these plans that could make them even more effective and useful tools for this purpose. Consider the following about 529 plans and the benefits this option could offer you:
- You can establish a 529 for any beneficiary, and you can have as many accounts for as many beneficiaries as you want.
- While there is no federal tax benefit for contributions to a 529, there may be some state tax benefits.
- Contributions to 529 plans can be effective ways to reduce your tax liabilities through annual gift tax exclusions.
- You can have a say in how to invest the money in the 529, giving you control over your estate assets.
You may benefit from seeking guidance regarding how to establish savings for your grandchildren. You can make choices now that will benefit you and your loved ones for years to come. If you are unsure of how to do that, you may benefit from seeking professional guidance regarding your objectives and the steps you can take to accomplish them.