Tag Archives: college

Creative Estate Planning that will Motivate Your Heirs

June 29, 2015 Dennis Astill Leave a comment

If it is important to you that your children or grandchildren have the financial ability to attend college, we can help you create an estate plan that will motivate them to obtain their degree. There is a lot of flexibility in estate planning and with the right strategy in place, we can help ensure that your goals for your family are met.

When it comes to planning for a beneficiary’s inheritance, your estate plan can set forth that a certain amount of money will be set aside for each child, grandchild or other loved one that attends college. In fact, you can restrict the beneficiary’s ability to receive the money upon whether or not he or she attends a higher education institution.

For instance, your estate plan can provide that every year of college or vocational school that is completed, your beneficiary could be a set amount of money. Another option is to set a lump sum payment to be made upon your heir’s graduation from a university. Further, you could set an additional amount or “bonus” that will be paid if a beneficiary obtains a graduate degree such as masters, law degree, medical degree or other similar form of advanced education.

Many people set a specific age they want their heir to reach before inheriting his or her money, but this doesn’t ensure that they will use it to pursue their education. We often create education trusts for grandchildren and even great-grandchildren, which not only reward completion of a degree, but provide funds for education in a way that provides minimum requirements, to avoid wasting funds on someone who doesn’t finish classes or who is not fully engaged. Additionally, if you have other goals in mind that you would like to use your estate plan to motivate your loved ones to accomplish, we can help. Contact us today to get started!

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

Asset Protection, Estate Planning

Do 529 Plans have Tax benefits?

January 28, 2015 Dennis Astill Leave a comment

When you are creating an estate plan, it is important to obtain tax benefits where possible. For general information regarding 529 Plans, please read our blog titled “Saving for College Through a 529 Plan.” This blog will discuss the tax benefits of 529 Plans, such as:

Federal tax benefits. Even though your contributions to a 529 Plan are not deductible from your federal taxes, your investment in the education savings account will grow tax-deferred. Additionally, when the beneficiary withdraws money to pay for college, the distribution is federally tax-free.
State tax benefits. If you created a 529 Plan in Utah and you reside there, the income is also exempt from state income tax.
Control over account. If you are making donations into the account, you retain control over it. For example, a parent that opens the account for the benefit of his or her child. With a few exceptions, the beneficiary has no rights to the funds. The donor/owner of the 529 Plan can decide when distributions should be made and for what purpose.
Tax reporting. Until withdrawals are taken from the account, you will not receive a Form 1099 to report taxable or nontaxable earnings.
Deposits. Most state 529 plans do not have income limitations or age restrictions. In fact, you can contribute substantial sums if you desire. Many state plans allow more than $300,000 per beneficiary.
Simplicity. Establishing a 529 Plan is a simple way to save for college. You can typically arrange for automatic deposits out of your bank account and the investments of your account are handled by the plan. In other words, you have the peace of mind knowing that you’re saving for college without any high maintenance demands.

It should be noted that some people prefer to use an irrevocable trust for education because of the flexibility a trust provides and the ability to control the funds while serving as the trustee. If you are trying to decide whether a 529 or an irrevocable trust would be more beneficial for you and your loved ones, call us today.

Estate Planning

Saving for College Through a 529 Plan

January 2, 2015 Dennis Astill Leave a comment

The cost of paying for higher education is steadily increasing. Most parents (and grandparents) are concerned with how their children will be able to pay for college. One option to consider is establishing a 529 education savings plan. The term “529 plan” comes from the section of the Internal Revenue Service code that creates and defines them. One of the primary benefits of a 529 plan is it provides a tax efficient means for contributing money that is earmarked for educational costs that a beneficiary can access in the future.

The contributions you make to a 529 plan are treated as a gift for tax purposes. Currently, you can make gifts up to $14,000 in value per person each year without being required to file a gift tax return. There is also a five-year election that can be made that allows you to contribute up to $70,000 in one year (or it can be up to $140,000 with your spouse) to a 529 plan. This election treats the gift as $14,000 payments over a period of five years. However, you cannot contribute any other funds to that beneficiary within that five year term without filing a gift tax, and if applicable, paying a gift tax. It should be noted that if you use the five-year election and you pass away before the fifth calenar year, any contributions made in the years after your death will be included as part of your taxable estate.

If you are looking for a wise investment and you are interested in contributing to your family’s future education, consider the 529 plan. It is an effective estate planning tool that allows you to provide for your children or grandchildren, and it permits you to decrease your taxable estate. This is especially true if your estate exceeds the exclusion amount.

Because the 529 plans require that funds be permanently ear-marked for education (and there is no guarantee that your family will seek higher education), some clients prefer to use an irrevocable trust for education of their children or grandchildren, which has more flexibility, and maintains control over the assets in your hands as a trustee. Understanding the benefits and limitations of 529 plan, and the benefits and limitations of an irrevocable trust is essential before making the decision to permanently set aside funds.

To learn more about using a 529 plan as part of your estate planning, contact us to schedule an initial consultation. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

Estate Planning

Does your College Student need an Estate Plan?

December 29, 2014 Dennis Astill Leave a comment

Under the law, your child is considered a legal adult when he or she reaches the age of 18 years. Most parents do not want to think about their young adult needing an estate plan, but in some situations, it is important to do so. If a young person is moving far away from you for college or a job opportunity, you should consider establishing a health care proxy, power of attorney or even a will or trust for him or her.

Why would your 18 year old need these types of legal documents? As soon as he or she becomes a legal adult, HIPPA prohibits healthcare professionals from sharing private medical information to anyone without consent. If your child is seriously injured or otherwise incapacitated and cannot communicate his or her consent for you to be involved in medical decisions, it can get complicated quickly. To prevent any confusion, you should have a loved one appointed as a healthcare agent, especially for a young adult living away from home.

Another important topic to discuss with your young adult is whether he or she desires to be kept alive by heroic measures if he or she would not have a meaningful quality of life. While this can be extremely difficult to discuss, it is essential for family members to talk about in case the worst case scenario occurs. You should also talk about organ donation and whether your young adult prefers to be buried or cremated.

Although most young adults have not accumulated significant wealth, ownership of any gifted funds or assets vest in your child at the age of 18. If your child should die before you, his or her assets may need to go through the probate process. Without an estate plan, your child’s estate will pass to the heirs-at-law, which usually will be you, as the parents. However, if you have been working to reduce your estate for tax purposes or asset protection purposes, the inheritance of such assets could disrupt your strategy. It may worth considering establishing a simple estate plan for your young adult directing assets to be left to siblings or other family members.

To learn more, please contact us for an appointment. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

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