In the Year of the Plan, we have an opportunity to make changes to our tax and estate structure in advance of the upcoming changes being authored and discussed almost daily by Congress. Effective Gifting to our family members should be at the top of our list. Gifting is giving money to our family. Effective Gifting builds wealth, engages our kids in their financial future, and provides substantial future benefits. Both reduce our estate and enhances the lives of our loved ones. We ask you to consider the following Effective Gifting strategies:
• Roths: Whether our kids are working part-time jobs or game fully employed, helping fund their retirement by either making Roth contributions directly to Roth IRA’s or augmenting monthly cash flow so they can participate in their employer’s 401(k) Roth Plan have lasting benefits.
• LTC: Long term care plans are cheapest when we’re young and healthy. They will also grow more tax efficiently when we’re young. Consider a level term LTC for your loved ones when they’re young. If newly married connecting to a life insurance policy may yield terrific benefits and peace of mind. Cash surrender grows tax free and can be used as a loan.
• HSA’s: Health Savings Accounts are offered by most employers today. Helping your kids fund these annually will help pay for future costs of health care. They grow tax free and can be used for long term care premiums.
• 529 plans: Funding 529 plans for our kids are terrific. The plan grows tax free, and if used for qualified tuition (which includes private education) is used tax free. We never stop going to school. The beneficiary of the 529 may be changed easily for kids, grand-kids, and beyond.
• Stock in trust: Low basis in kind stock gifts held in trust transfer the capital gain tax to a lower bracketed taxpayer (normally) will lower the effective tax rate of the family, keeping the savings in the family pocket.
Questions? Call us we’d love to help – (314) 993-4285.
