Education Savings Plan in Estate Planning

Sunday, September 20th, 2009

Estate laws truly affect your assets.  Most of your assets constitute your estate when you pass away.  And since you know that an estate over $3.5 million will be taxed up to 45%, you may want to keep your estate below that level.  In order to do that, you can give gifts or acquire a 529 education savings plan.

Actually, this kind of education savings plan would allow you to select any relative or friend as your beneficiary.  That person is expected to incur education costs.  Moreover, the plan offers flexibility like for example; you can change the beneficiary any time, change investment elections, and make various contributions to the account.

You can choose from several 529 accounts that may be available in your state.  If you’re a resident of Ohio for instance, you can choose Ohio 529 plan and deduct your contributions from the state income tax.  Currently, IRS rules are allowing investors to make large lump sum contributions to the 529 plan.  In 2009 you can contribute up to $65,000 for individuals or $130,000 for couples.

So 529 education savings plan not only allows you to help your children grandchildren, nephews, nieces, and other loved ones from pursuing education, it would also allow you to qualify for tax deductions.  Seek advice from your estate planning attorney whether this strategy could be applied in your situation.

Tags: assets, attorney, education, estate, Estate Planning, laws, Ohio, plan, savings, strategy, tax deduction
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