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Note: Nothing in this publication is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same. [See IRS Circular 230.]

Volume Six Number Eight August 2008

Majoring In Minors

Majoring in Minors Do you have any minor children (i.e., under age 18 in most states)? If you do, then your calendar is likely filled to overflowing with their school commitments and extra-curricular activities. Besides time, all of these commitments and activities require money … and lots of it. Since your children are worth the investment of both your time and your money, what plans have you made for them in a world without you? What would happen if your children were orphaned today?

Back-up Parents

Who would you entrust with the responsibility of rearing your minor children to adulthood? By default, any surviving parent will be the legal guardian, or back-up parent, over your minor children. However, in the event there is no surviving parent, you must legally appoint the guardian(s) of your own choosing or a court will make the appointment for you. When selecting guardians, most parents appoint family members or friends with whom they share common principles, values and religious beliefs.

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Leveraging Legacies

Levaraging Legacies, 529 Plan For many people, saving for retirement was once a top priority. Now, having reached retirement, they find that their resources actually exceed their needs and they can provide financial assistance to others. Some retirees find satisfaction in supporting their favorite charities, their children or both. Still others find great pleasure in helping their grandchildren, especially with post-secondary education funding. In fact, more than one grandparent has said if I knew how much fun grandchildren were, I would have had them first!

Section 529

The law recognizes this special grandparent-grandchild relationship, offering several ways to facilitate financial generosity. In this article we review Internal Revenue Code § 529 (Section 529).
Depending on your unique circumstances, there may be significant tax and non-tax benefits available under Section 529. Otherwise known as Qualified State Tuition Programs, Section 529 plans are administered at the state government level. Each state may design its own Section 529 plan (or possibly multiple plans) within certain federal parameters.

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Did You Know?

Did you know that:

While three in ten Americans DO have a plan, the average age of a will coming into a law office for update or probate is nearly 20 years?
A Power of Attorney of similar vintage may be rejected by banks and other third parties?
In three out of four cases, a Health Care Directive (also sometimes called a "Living Will") is unavailable when needed?
Nine out of ten Americans MISTAKENLY believe that life insurance proceeds are automatically exempted from Federal Estate Tax?
The Wills of most married couples control ONLY personal effects?
There are legitimate means of leveraging the $12,000 annual gifting exclusion, of avoiding capital gains tax on super-appreciated low-yield assets, and of ensuring that 99% of assets flow to the next generation in a thoughtful, protected manner?

College Funding

It is a jungle out there.
At least that is how most people feel when they begin researching the myriad options available for financing a post-secondary education.
One helpful resource is the College Savings Plans Network (CSPN) which is affiliated with the National Association of State Treasurers. Visit the CSPN website at collegesavings.org and research the Section 529 plan for your state of residence (and even see how the plan of your state compares to plans available in other states).
Another helpful online resource is savingforcollege.com. This website focuses on the in’s and out’s of Section 529 plans as a means of post-secondary education financing. Of course, you will want to find out what type of programs are available through the federal government, so visit studentaid.ed.gov or call the Federal Student Aid Information Center toll free at 1-800-4-FED-AID. There is a wealth of information to download there, too.

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