You often associate estate planning with the division of assets after death, but what about planning for your children’s futures if you are no longer around to support them? Estate plans are in place to ensure financial security for those you love. Creating education funds should be at the top of your estate planning priority list.
Why Is an Education Fund Necessary?
Leaving your children and grandchildren with the gift of education will only relieve them from unnecessary stress while seeking further schooling. Instead of having to work multiple jobs while going to college or dropping out due to financial stress, your education fund can take care of school tuition and payments.
Types of Education Funds
When incorporating an education fund into your estate plan, several options exist. The most common ones include:
1. 529 Plans: The 529 plan offers tax advantages and tailor-made savings to fulfill the dreams of educational pursuits. The money inside the fund grows tax-free, and the money withdrawn for education is tax-exempt. These plans offer flexibility and can be transferred from one beneficiary to another if needed.
2. Educational Trusts: Trusts can be tailored to your preferences and can provide more control over how the funds are used. Leave instructions for how the money can be used, specifying university tuition, books, housing, and even food allowances. If your loved one chooses not to go to college, offer alternative qualifications for receiving the funds.
3. Custodial Accounts: Experience the joy of gifting assets to minors through these remarkable custodial accounts. With UGMA and UTMA, you can pave the way for your children's or grandchildren's educational journey, with the intent that they use the money for education when they reach adulthood. These gifts have fewer restrictions on how they are spent once received.
Create an education fund as part of your estate plan so that you can provide the best future possible for your loved ones. They will be so grateful!
Contact Miles & Hatcher
Are you ready to secure a brighter future for your loved ones through an education fund? Take the first step towards thoughtful estate planning today.
Contact Miles & Hatcher, LLP at (909) 481-4080 to schedule your free consultation with our experienced estate planning attorneys. Our team will guide you through the process of setting up an education fund tailored to your goals, ensuring that your family's dreams are protected and nurtured for generations to come.