Many families cite saving for children’s or grandchildren’s education as one of their top financial goals. If you are among this group, you
may want to consider a 529 college savings plan or a Uniform Gifts (or Transfers) to Minors Act account (UGMA or UTMA) — or some
combination of these — to help you achieve your objective.
Estate Planning Benefits
A 529 college savings plan offer severals key advantages. You maintain control of the investment, the money is removed from your
taxable estate and there are no annual contribution limits — although contributions in excess of $14,000 a year ($28,000 if a spouse
joins in the gift) are generally subject to the federal gift tax. There is one exception: You may contribute five years’ worth of gifts all at
once, or $70,000 per beneficiary, providing you do not provide additional gifts to the same beneficiary during the remainder of the fiveyear
period.1 Distributions for qualified education expenses are tax-free, and you may change the beneficiary to another qualified family
member within certain guidelines.
A 529 plan is designed to finance higher education, such as college or graduate school.
A Matter of Trust
If you are comfortable having the beneficiary control the investment, you may want to consider an UGMA or UTMA account, an
irrevocable trust managed for the benefit of a minor. The account legally belongs to the minor, but the trustee controls it until the minor
is age 18 or 21, depending on the state where the minor lives. Assets may be used for any purpose — including education — that
benefits the minor.
You may want to review trends in college costs, your financial situation and other factors before selecting the most appropriate college
planning strategy. Whatever you decide, your family is likely to benefit from one of life’s greatest advantages — the gift of an education.
Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Barnes Capital Group, a Registered Investment Advisor. Barnes Capital Group is a separate entity from LPL Financial.