Paying for College Tuition via North Palm Beach Estate Planning

If you’re building an estate plan in North Palm Beach, you might want to leave behind the gift of education rather than cash or other assets. This is an understandable priority, as college education could help your family members earn their own wealth rather than depending on their inheritance. Not only does this preserve generational wealth, but it may also provide you with peace of mind. How exactly do you use an estate plan in Florida to pay for college tuition?

It’s Never Too Early to Start Using Estate Planning to Save for College 

Even young parents can begin saving for college effectively using estate planning strategies. In fact, it is best to begin saving for college as early as possible. College tuition is increasing, and these costs will become more expensive the longer you wait.

That being said, many grandparents also use estate planning to pay for the college tuition of their grandchildren. These elderly individuals may need to consider slightly different estate planning strategies compared to young parents.

Consider 529 Plans 

The obvious choice is a 529 plan. This tax-deferred saving option is specifically geared toward college tuition, and it is possible to “lock in” current tuition costs with a prepaid 529 plan. This means if you purchase four years of (usually in-state) college tuition today, your grandchild or child could use this to earn a four-year degree at any point in the future – even if the cost of tuition rises dramatically. To put this into context, average college tuition has more than quadrupled since the 1990s. Imagine if you had “locked in” those prices for your children or grandchildren today.

Another option is a savings 529 plan, which allows you to contribute gradually to college costs. While this does not allow you to lock in current prices, it provides more flexibility and the same tax-deferral benefits. All earnings from 529 assets are tax-exempt, allowing you to invest these funds and generate even more for your loved ones.

Consider Using a Trust 

Grandparents may want to consider trusts to ensure their beneficiaries spend their inheritance on education – and not on frivolous expenses. Your trustee will only allow your beneficiaries to spend their inheritance on college tuition, and this could provide you with considerable peace of mind. Regardless of what your beneficiaries want, they may have no other choice but to earn a college degree (there should still be an escape clause within the trust for unexpected contingencies). You might also leave behind additional funds as a reward once they earn their degree. This could serve as a powerful motivational tool that lifts your loved ones to new heights.

Can an Estate Planning Lawyer in North Palm Beach Help? 

An estate planning lawyer in North Palm Beach may be able to help you cover college tuition even after you pass away. Although there are various ways to accomplish this goal, each family is different. As a result, you may need to discuss your unique circumstances with an experienced lawyer in order to establish the most appropriate option. Begin this discussion today by contacting Kitroser Lewis & Mighdoll.

Sources: 

investopedia.com/terms/1/529plan.asp#:~:text=Section%20529%20plans%20are%20tax,plans%20and%20prepaid%20tuition%20plans.

collegecost.org/the-use-of-a-crummey-trust-for-a-college-education/