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Setting money aside for the college expenses |
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Setting money aside for the college expenses
At first :
-think about the amount of money needed for the college!
-ask the child about his or her college attending (which one would he or she like to attend ?)
-determine whether you could benefit by "gifting" money to a 529 plan (There are two types of 529 plans - prepaid tuition plans, which let you lock in tomorrow's tuition at today's rates, and college savings plans, which let you choose from a menu of investments and offer more return potential, as well as risk)
Remember that:
• State-sponsored Section 529 college savings plans have the potential to double as high-powered estate planning tools.
• You will be allowed to make five years' worth of tax-free gifts in one year, but only once every five years.
• Although the assets gifted to a 529 plan are removed from your estate, you retain control over investment, withdrawal, and beneficiary decisions.
• If you want to make significant contributions to a 529 plan, be sure to choose a plan that does not impose contribution limits that would interfere with those plans
• Speak with your estate planning attorney and/or tax professional to learn whether implementing a new financial strategy might affect your other .
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