When you contribute to a 529 plan, you’ll not only help your child, grandchild, or other loved one pay for school, but you’ll also remove money from your taxable estate. This will help you minimize your tax liability and preserve more of your estate for your loved ones after you die. So, if you’re thinking about contributing money to a 529 plan, it pays to understand the gift and estate tax rules.
In tax lingo, your principal residence is the place where you legally reside. It’s typically the place where you spend most of your time, but several other factors are also relevant in determining your principal residence. Many of the tax benefits associated with home ownership apply mainly to your principal residence — different rules apply to second homes and investment properties. Here’s what you need to know to make owning a home really pay off at tax time.
Are you suddenly on your own or forced to assume greater responsibility for your financial future? Unsure about whether you’re on the right track with your savings and investments? Finding yourself with new responsibilities, such as the care of a child or an aging parent? Facing other life events, such as marriage, divorce, the sale of a family business, or a career change? Too busy to become a financial expert but needing to make sure your assets are being managed appropriately? Or maybe you simply feel your assets could be invested or protected better than they are now. These are only some of the many circumstances that prompt people to contact someone who can help them address their financial questions and issues.
According to a recent study by TD Ameritrade, 25% of baby boomers are supporting their family members.. Support to adult children averages out to $10,000 per year. That’s $10,000 that boomers aren’t saving, contributing to retirement accounts, or investing. Can your retirement afford that kind of generosity? If you fall short of your retirement goals, is the adult you’re bailing out going to bail you out during your golden years? Before you write your struggling young adult another big check, we’ve identified four key questions you can ask yourself.
A recent study found that 57% of parents regretted not taking more financial action during the first year of their baby’s life. Working through this simple checklist with your spouse will minimize your own regrets, assist your budgeting, and help you both sleep a little better… that is, when the baby lets you.
Financial planning is more than just a series of savings and investments you lock away and forget about. Your money doesn’t exist in a vacuum. Your financial needs are going to fluctuate in response to the transitions that we all go through as we work, raise our families, and look ahead to retirement.
As “baby boomers” age into retirement and a lot of trusts set up by the grandparents years ago begin distributing funds to the grandkids (typically by ages 25-35), many of our clients are wondering how to counsel their adult children on using this windfall. Regardless of the source of funds, many parents are grappling with the issue of how much money is appropriate for their grown child and how the funds can either enhance their lives or potentially send them down a negative path.
This is a brief summary of the significant changes to estate tax laws and 529 Plans this year, provided by Kenneth E. Devore & Associates.
With the strong stock market returns, many clients have appreciated securities in their investment accounts and may incur capital gains tax should they sell these holdings. One avenue many use is a “donor advised fund” such as the one offered through Fidelity Investments.
By Dannell Stuart, CFP®Partner, Director of Business Development Have you been named in someone’s estate plan as their executor or trustee? Whether it’s an aging parent, sibling, or a friend, preparing for this eventual responsibility can and should start as soon as your name is written into their documents. If you invest time now in understanding both the big picture …