Grandparents often find themselves looking for a way to help their children or grandchildren with education expenses. There are a few strategies grandparents may consider depending on their preferences. The following are a few strategies grandparents may consider to help with higher education expenses. Grandparent-owned 529 plan. In this strategy the grandparent owns the 529 plan in their name and makes contributions to the plan. The benefit of this is that the grandparent can reduce their estate, take a potential state tax deduction (if their state allows), control the investments, take tax-free qualified distributions, and name/change the beneficiary. Furthermore, when the beneficiary files for financial aid (FAFSA), grandparent-owned 529 plans are not included in the assets of the parent or beneficiary in determining financial need. However, there’s potential downside to this strategy when the beneficiary files the FAFSA form to determine eligibility for financial aid. FAFSA considers parent-owned 529 plans […]
beneficiary
529 Plan Beneficiaries
Owners (usually parents) of 529 plans set them up for the purpose of funding future college education expenses for beneficiaries (usually their children). However, 529 plans allow for beneficiaries other than the owner’s children. Beneficiaries may be changed on 529 plans at the owner’s discretion. Who qualifies as a beneficiary for a 529 plan? According to IRS Publication 970, the following may be beneficiaries of 529 plans: The account owner. Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them. Brother, sister, stepbrother, or stepsister. Father or mother or ancestor of either. Stepfather or stepmother. Son or daughter of a brother or sister. Brother or sister of father or mother. Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. The spouse of any individual listed above. First cousin. 529 plans only allow one beneficiary per plan. Owners with multiple children or beneficiaries will need to determine their plan […]
Share, tweet, print, email, like or pin this post:
The Designation Everybody Should Be Aware Of
At some point in your life you have probably started a new job, applied for life insurance, started an IRA or retirement account, or opened a bank account. You may remember when filling out the paperwork that the form asked for a beneficiary – both primary and contingent. This is simply telling the account’s custodian to whom you want your account to go to should you pass away. Your primary beneficiary is the first (hence the name primary) that receives account balance or death benefit. The contingent is who receives the account balance in the event your primary beneficiary predeceases you. When choosing beneficiaries you had the choice of allocating a certain percentage to the primary and some to the contingent if needed. You may have even had two or more primary beneficiaries that you allocated a certain percent of your account to totaling 100% Then you may have forgotten […]
Share, tweet, print, email, like or pin this post:
Have a HEART
Yes, I am organizing this writing around Valentine’s Day as a clever way to introduce a benefit military service members and their families can take advantage of as well as tie it into the title itself. The Heroes Earnings Assistance and Relief Tax Act or HEART Act provides service members and their families with certain pension and tax benefits while living or in the event of the service member’s death. According to http://myarmybenefits.us.army.mil/ these are some of the benefits that can be taken advantage of due to the HEART ACT: Accelerated vesting in the retirement plan (but not any imputed additional benefit accruals for the period of military service) Additional life insurance benefits Other survivor’s benefits depending on the benefits of the employer Employers also have the choice of treating the disabled or deceased service member as if they had returned to work the day before the disability or death occurred. […]
Share, tweet, print, email, like or pin this post:
Avoid Awkwardness in the Afterlife–Confirm Your Beneficiary Designations
This is a topic that I cover with all clients, and one that I recommend you for everyone with retirement plans and other accounts with beneficiary designations. Too often we think we have the beneficiary designation form filled out just the way we want it, and then (once it’s too late) it is discovered that the form hadn’t been updated recently – and the designation is not what we hoped for. I made this recommendation to a client not long ago. He assured me that he had all of his designations set up just the way he wanted. His wife, sitting next to him in our meeting, asked him to make sure – talk to the IRA custodian and get a copy of the designation as it stands today. A bit miffed about it all, he agreed to do so, and did the next day. Guess what he found – […]
Share, tweet, print, email, like or pin this post:
Per Stirpes / Per Capita–What Does it Mean?
When working with your estate planning (even if you don’t realize you are) you may run across the terms per stirpes and per capita. Choose one type over the other and you could have a significant impact on who eventually receives your estate. So what do these two terms mean? Dictionary.com defines the two terms as follows: per stirpes – noun; pertaining to or noting a method of dividing an estate in which the descendants of a deceased person share as a group in the portion of the estate to which the deceased would have been entitled. per capita – noun; noting or pertaining to a method of dividing an estate by which all those equally related to the decedent take equal shares individually without regard to the number of lines of descent. This probably seems like just so much gunk to you, so let’s look at an example. Joe […]
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.