Whether you’re a parent or a grandparent, one of the hallmark ways of preparing for the upcoming generation is the college savings 529 plan. There’s a bit of bittersweet news there nowadays: overall funds are down, but the alternatives even lower. According to a recent Wall Street Journal article, and Morningstar research, investments in 529 plans fell an average of 9.5% in the third quarter and are now down 5.9% this year through Sept. 30. This marks the worst setback since the market crash in early 2009. Of course, thanks to market volatility and several rounds of bad news from…
Simply defined, a charitable remainder trust allows you to transfer cash or assets to the trust — from which you may receive income for life or, if you prefer, a fixed term not to exceed 20 years. The income can be paid over your life, your spouse’s life and even the lives of your children and grandchildren. (The guidelines are outlined in IRS code section 664.) In essence, the trust takes advantage of the tax-exempt status of the nonprofit it benefits. Sometimes, giving an asset to charity doesn’t mean you can no longer enjoy benefits from it. Yes, it’s true….
One solution: Donating the principal to a nonprofit in the form of a "charitable gift annuity" in exchange for lifetime fixed annuity payments. Remember the good old days, you know, when you could invest in a certificate of deposit (CD) and the bank would actually pay you something called “interest” on your deposit? No, really, I kid you not. Obviously, I am being a bit factitious, but you get the point. It is hard enough to make money these days, let alone accumulate wealth. Let’s say you are retired and are looking for a place to put your money to…
As the old saying goes, “If you’re giving while you’re living, then you’re knowing where it’s going.” But the new tax legislation passed in December makes gifting even more attractive for wealthy families. A recent article in the Wall Street Journal, “The $5 Million Tax Break,” points out why lifetime gifting is suddenly so attractive under the new laws. It’s a good article, worth reading, but here are the high points, in a nut-shell: For the next two years, the gift-tax exemption jumps to $5 million from $1 million for individuals, and to $10 million (up from $2 million) for…
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