Grandparents often want to help with their grandchildren’s college tuition bills. But you should be very careful about using a 529 plan for these expenses. The reason? College financial aid programs generally don’t consider parents’ contributions from a 529 plan as student income, but they typically do consider grandparent 529 contributions as income. As a result, these contributions could reduce a student’s eligibility for grants, subsidized loans, and work-study programs. Only 11% of grandparents are aware

A power of attorney document allows someone else to act as your agent and handle your legal and financial affairs. It’s critical to have such a document in case you become incapacitated. Sometimes, people want to name more than one agent. For instance, a person may have two children, and not want one child to feel that the other is being favored. Sometimes a parent will name two children and give them both access to all

Sometimes, despite everyone’s best efforts, things change and the terms of an older, irrevocable trust just don’t work as well as they could in the present circumstances. But there’s a movement afoot to allow people in such a situation to solve the problem by moving the assets from an older trust into a newer one with more appropriate rules. This is sometimes called “decanting” a trust, because you’re basically pouring the assets from an older container

As a result of changes in the law, a lot of wills that were drafted even relatively recently may now result in a capital gains tax issue, and if you have such a will, you might want to consider revising it to save taxes. Here’s the background: When a person dies, he or she can leave an unlimited amount of assets to a spouse without incurring the federal estate tax. If assets are left to anyone

If you’re wondering at what age your children or grandchildren will be old enough to handle an inheritance, well, you’re not alone. U.S. Trust recently conducted a survey of wealthy Americans (with assets of $3 million or more) and asked them that precise question. The issue is important because many parents leave assets in a trust for children or grandchildren until they reach a certain age, so the parents have to choose an age at which

Often, one of the hardest decisions people make in the estate planning process is how much (and when) to tell their children or other heirs about their plans. There’s no single right answer for everybody; what to do depends on the nature of your planning and your family circumstances. But it’s worth giving the issue some consideration. Many people are very hesitant to reveal the details of their family’s expected inheritances. A recent survey by UBS

In the past, many people’s wills included a sizable donation to charity. Because the federal estate tax was so burdensome, including charitable bequests in a will was a good idea since it reduced the amount of tax the estate had to pay. Now, however, the federal estate tax applies only to estates of well over $5 million. As a result, for a great many people, leaving money to charity in a will no longer provides any

Some taxpayers with large state income tax bills have been trying to avoid them through the use of out-of-state trusts. These trusts have been created in three states that have no or minimal state income tax – Wyoming, Nevada and Delaware. The idea is that people in high-tax states can set up trusts in these low-or-no-tax states to hold the investments that produce the income. The trusts are called “incomplete non-grantor gift trusts.” A Wyoming incomplete