I heard an excellent quote from radio host Dave Ramsey that said, “In an effort to be ‘nice’ I used to be unclear. It is unkind to be unclear: Be a gentle truth teller.” While I don’t always succeed at the “gentle” part, I am relatively straightforward most of the time with my opinions.
The looming “fiscal cliff” has generated no shortage of headaches for affluent families that hope to pass assets along to their descendants. Under current law, the lifetime exemption on the estate and gift tax for individuals will drop at the end of the year from $5.12 million to $1 million, a fact that has many people scrambling to rearrange their estate plans before the New Year’s Eve ball drops.
- Alison Seiffer for WSJ
But as MarketWatch’s AnnaMaria Andriotis points out today, there’s one potentially attractive estate-planning tool that many investors are neglecting: The 529 college-savings plan. Most such plans have a total contribution limit of $250,000 to $350,000 per beneficiary (just about enough to pay for four years at an Ivy League bastion, last time we looked). And unlike with some other estate-planning vehicles, the giver retains a fair amount of control over the money. “Account owners can withdraw any portion of the balance in their 529 plans if they ever need it,” Andriotis writes (though they may owe taxes on any investment gains). And the giver can even change beneficiaries if the original heir winds up not needing some or all of the funds.
Encore: How procrastinators can reduce their tax burden.
Ted Benna, the benefits consultant who pioneered the original 401(k)s, says the plans need to be revamped.
Financial and Estate Planning Lucky fan Christian Lopez “gave” the $250,000 baseball he caught from Derek Jeter’s 3,000th hit back to Jeter. But he will most likely not face any gift tax implications. A 1998 IRS statement (issued during the … Continue reading →
Life insurance is now available for those 60 and older or even after a serious illness, but of course at higher rates. Here are a few things to consider when shopping for insurance.