Without a doubt, one of the joys of being an elder law attorney in Savannah comes from seeing the pride clients have in their grandchildren. They continually tell us how amazing it is to see their children become parents and how much they want to be a part of supporting this next generation of their families. There are a lot of tools that a Savannah elder law attorney can help clients leverage to make this a reality, and one of them is the 529 account.
Unfortunately, it’s easy to get overwhelmed by all of the 529 accounts out there. There are lots of options and decisions to make, and sometimes it all seems so complicated that folks just throw up their hands and plan to do it “later.” Of course, elder law attorneys in Georgia recognize that putting things off until “later” doesn’t always work out to one’s advantage!
So, let’s look at the benefits of a 529 account and turn “later” into “now.”
Basics of 529 Accounts
At its most basic level, a 529 account is a place where parents, grandparents, and others can safely place their money in order to save for a young person’s future college education. The government manages the money and sees that it is invested and grows over time. When the young person reaches the stage in life where he or she is looking into college, the money is available to pay for tuition and other expenses that go along with higher education.
While having a college fund is certainly an advantage to the young person seeking an education, elder law attorneys in Savannah also see other benefits this can offer. For one thing, the earnings on the plan are not taxed, so the beneficiary isn’t penalized. As for the grandparents, the money placed into the 529 account isn’t considered in their taxable estate, reducing the taxes paid after death. As much as $14,000 a year could be placed into one of these accounts in 2014 without even having gift taxes due!
An additional benefit that many people don’t necessarily consider is the fact that the account stays in the grandparent’s name. This means that it will generally not affect the young person’s eligibility for financial aid when it’s time for college. That is a major advantage when trying to figure out how to fund higher education.
Working with an Elder Law Attorney in Savannah
Again, there are a lot of ins and outs when it comes to 529 accounts. The rules in Georgia will differ from those in other states. That said, many states have set up systems where even non-residents can take advantage of their plans. This is one of the reasons that it’s a good idea to work with a lawyer who has insight into which plan will best work for your situation. A good elder law attorney or estate planning attorney can work with you and your financial advisor to help you compare the pros and cons of the various plans so you can pick the right one