For many parents, savings for their kids education is a big concern. Many opt to put them in a tax-deferred savings vehicle like the 529 plan.
Not only is this a good way to save for children's education related expenses like tuition, lodging, groceries, books, etc but there are some other loophole available too.
* You can change the beneficiary at any point to favor someone who goes to a more expensive school.
* You can use the money for your own education.
* You can give upto $60,000 to a single beneficiary in one go, although you can't give that same beneficiary any more contributions for 5 years.(since the maximum gift amount is $12,000 per year)
* You can use it as an estate planning tool by moving money out of your estate (but not necessarily out of your control). If grandpa & grandma each gift $50,000 to each of their 5 grandkids, thats $500,000 out of the estate in one fell swoop! Of course, they better not die too quickly, else some of it may be taxable!
* Being able to change the beneficiary may also allows you to skip paying estate tax for several generations!
It might be complicated to understand and setup, but I think its definitely worth checking into.
Showing posts with label Planning. Show all posts
Showing posts with label Planning. Show all posts
Why You Need A Good Attorney
Even though Anna Nicole Smith's husband (did they marry? I don't really follow this sort of thing) Howard Stern was an attorney, her will was supposedly taken straight out of a textbook and wasn't even proof-read. She apparently left everything to her son (who's deceased) and specifically excluded all unborn future kids.
Don't know why she'd write in something as wierd as that but apparently thats what you get when you pay $19.99 for your will. So not only will Dannielle Smith-Stern be dragged through a six ring circus of paternety suits, but her mom's money will probably be dragged through the probate courts, the IRS and then finally through her legal guardian's hands. (& maybe her attorneys too!) Good luck getting that dough!
When you die, the last thing you want is for your loved ones to
(a) fight over your money/possessions
(b) pay an obsene amount of tax - both inheritance and income tax
(c) be dragged through the probate courts to get it
Better you spend a little time learning about it and a little bit of money to make sure everything is sorted out before you die.
Don't know why she'd write in something as wierd as that but apparently thats what you get when you pay $19.99 for your will. So not only will Dannielle Smith-Stern be dragged through a six ring circus of paternety suits, but her mom's money will probably be dragged through the probate courts, the IRS and then finally through her legal guardian's hands. (& maybe her attorneys too!) Good luck getting that dough!
When you die, the last thing you want is for your loved ones to
(a) fight over your money/possessions
(b) pay an obsene amount of tax - both inheritance and income tax
(c) be dragged through the probate courts to get it
Better you spend a little time learning about it and a little bit of money to make sure everything is sorted out before you die.
Getting Insurance
After playing phone tag for nearly 4 months I finally met with an insurance agent today. I've been meaning to get disability and life insurance for myself and the wife and today I got some good quotes.
For me a $1000/mo disability policy thats indexed to inflation costs only $29/mo. Term life insurance that starts out at $300k and eventually reaches $600k in the 10th year only costs about $248/year. It increase every year but its not a lot. In the 10th year it'll be around $745/year. The advantage with this plan over a fixed premium product is that this plan is good until I'm 80. The fixed premium product is only good for 20 years.
The cost for my wife's policy is cheaper by about $50-60/year. We're not getting disability for her since her company has awesome coverage already.
Since I'm getting insurance as a safety net for my family and future kids, I want to keep up my policy until they're atleast out of college. Since I don't currently have any kids, we're talking atleast 20-25 years. Getting a policy that lasts for nearly 50 years is a good way to ensure this, since I won't have to go through medical check-ups again and there's no chance of my failing to qualify for insurance because of bad health later on.
Insurance is cheapest when you don't need it! If you're planning on having kids you need to get life insurance. If you have a decent job you need disability. Get it now!
For me a $1000/mo disability policy thats indexed to inflation costs only $29/mo. Term life insurance that starts out at $300k and eventually reaches $600k in the 10th year only costs about $248/year. It increase every year but its not a lot. In the 10th year it'll be around $745/year. The advantage with this plan over a fixed premium product is that this plan is good until I'm 80. The fixed premium product is only good for 20 years.
The cost for my wife's policy is cheaper by about $50-60/year. We're not getting disability for her since her company has awesome coverage already.
Since I'm getting insurance as a safety net for my family and future kids, I want to keep up my policy until they're atleast out of college. Since I don't currently have any kids, we're talking atleast 20-25 years. Getting a policy that lasts for nearly 50 years is a good way to ensure this, since I won't have to go through medical check-ups again and there's no chance of my failing to qualify for insurance because of bad health later on.
Insurance is cheapest when you don't need it! If you're planning on having kids you need to get life insurance. If you have a decent job you need disability. Get it now!
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