Gifts to 529 Plans During Economic Turmoil – Overview
By: Martin M. Shenkman, CPA, MBA, JD
Gifts and 529 Plans
What is a 529 plan? A college savings plan.
How much can you give? You can give $13,000/year per person.
5 year front loading. You can give up to five years at one time.
Equalization issues. If you give to one grandchild, can you give to all? What if your son has three children, but your daughter only one? Do you equalize? Who and how?
Can you do it under a power of attorney? If you don’t specify it, you cannot be sure an agent can do it.
The estate tax is here to stay. 529 plans are a great way to give and reduce your estate tax in a simple and cost free manner (no lawyers).
With the economic recession, 529 plans are a great way to relieve one of the most significant costs your heirs may face.
Be aware that if college is paid out of a 529 plan, your children may not be able to take advantage of the many proposed college tax breaks.
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