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ost of us associate 529 accounts as college savings vehicles. They’re flexible, allowing you to transfer assets to anyone, including yourself, for the express purpose of furthering the education of your beneficiary. But did you know that a 529 can be a powerful estate planning tool, too?
About the author: Over the course of her professional career as a financial advisor, Melanie J. Housden, AAMS®, has been on a continual journey to provide better opportunities with lower cost to clients. The ability to finally do business as Melanie J Financial, LLC, has been a long-time dream. Melanie learned the secret to success working alongside her grandfather at his hardware store in McLean, a small town in the Texas Panhandle where she grew up. “My success in developing lifelong relationships with my clients comes from the skills my grandfather taught me,” she said. Melanie holds a business degree from Wayland Baptist University, her Series 7, 63, 66, Insurance License and the AAMS® – Accredited Asset Management Specialist designation and has two decades of experience in the financial industry. “Learning what is important to my clients enables me to devise a plan that will help them pursue financial freedom through all aspects of their lives and will allow their legacy to continue on in their families lives,” Melanie says. “I keep their goals and needs at the forefront of every decision. My clients are successful people – from all walks of life. But they worry that they might not be making the very best decisions when it comes to living a rich and full life. If I can take the financial worries away from my clients, then I am successful. My clients are like a part of my family and I treasure each and every one of them. Truly, we are stronger together.” Melanie currently resides in Hamilton with her husband Rick. They have two daughters: Alexandria (and husband Reagan), and Abbie. Outside of work, Melanie loves spending time with her family including their three dogs Dixie, Lily, and Dude. She loves to travel and shop. An advocate for her community, Melanie is currently a Board of Director for the Hamilton Economic Development Corporation. Melanie J. Housden, AAMS® Wealth Management Advisor, RJFS 110 North Bell Hamilton,TX 76531 (254) 386-4500 22 Our Hometowns | Volume 2 Issue 3
Modern estate planning Not everyone is in a position to set aside money for the next generation without jeopardizing their own goals, but if you’re fortunate enough to do so, it’s worth looking into your options. Specialized savings accounts, informally referred to as 529s, could be at the top of your list. They have quite a few advantages for the beneficiaries – but there are benefits for the donors, too, given the high maximum contribution limits and tax advantages. The framework Under the rules that uniquely govern 529s, you can make a lump-sum contribution to a 529 plan up to five times the annual limit of $15,000. That means you can gift $75,000 per recipient ($150,000 for married couples), as long as you denote your five-year gift on your federal tax return and do not make any more gifts to the same recipient during that five-year period. However, you can elect to give another lump sum after those five years are up. In the meantime, your investments have the luxury of time to compound and potentially grow. Other benefits If your chosen beneficiary receives a scholarship or financial aid, they may not need some or all of the money you’ve stashed away in a 529. So you’ve got options here, too. • You can change the beneficiary to another member of the family (ideally in the same generation), as many times as you like, since most 529s have no time limits. • You can take the money and pay the taxes on any gains. Bottom line Saving for college takes discipline, as does estate planning. Talk to your professional advisor about the nuances of different investment strategies and vehicles before making a years-long commitment. As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. © 2021 Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Melanie J Financial, LLC. is not a registered broker/dealer and is independent of Raymond James Financial Services.
