Do You Have Grandchildren In Pennsylvania?
Grandchildren are a joy for most grandparents. As the saying goes, grandkids are more fun than raising your own children because, at the end of the day, you can usually give them back to their parents. What is not so fun is how the cost of living keeps going up. As a grandparent, you may be concerned about how your grandchild will be able to afford a higher education. Your children may not be able to save enough in time to pay for your grandchildren’s college expenses.
If you are wondering how you could make a contribution to your grandchildren’s future, call our office in Pittsburgh to learn more about ways you can contribute to your grandchildren’s present or future education. Founded in 1992, our core mission at Beroes Law Center is to provide compassionate legal help for Pennsylvania families. It does not take much to make a lifetime of difference for your grandchildren, let us show you how.
What Is A Grandparent-Owned 529 Plan?
Grandparents who want to contribute educational funds for their grandchildren have several options to do so. You can save good old-fashioned cash at the bank, make provisions in your estate plan with an educational trust and you can also open a 529 savings plan in your name for your grandchild. In Pennsylvania, contributions to the College Career and Savings Program Account are exempt from the state’s inheritance tax regulations. Other benefits of a grandparent owned 529 plan include:
- You may make annual contributions up to $17,000 into a 529 plan for education
- Upon initial opening the account, there are provisions for making up to five years of annual gifts at once without facing gift tax penalties
- The 529 plan is a means for growing your cash investment as an after-tax contribution
- When used specifically for education costs, the earnings and distribution of funds are tax-free
- Up to $10,000 may be spent toward elementary, middle and high school tuition investing
- For your grandchild in college or graduate school, 529 funds can be used to pay for a full range of qualified expenses such as tuition, fees, supplies and books
- When you deposit your annual gift into the 529 plan, it is no longer part of your estate; this is good news for estate tax planning
There are significant tax advantages, flexibility for the educational use of the funds and a means for you to control distribution to your grandchild. There are also some drawbacks when it comes to potential financial aid your grandchild would qualify for; limited investment options; and penalties if you withdraw the 529 funds for anything other than paying for education-related expenses.
If you have grandchildren in Pennsylvania and you want to explore which options are best for providing for your grandchildren’s current or future, we can help you set up a fund for this purpose.
Contact Beroes Law Center To Explore Options For Helping Your Grandchildren
Education is freedom but it can also be expensive. We are happy to meet with you and your financial planning professional to discuss the full scope of choices. Call us at 412-621-6811 to schedule a free consultation to discuss how to start a grandparent-owned 529 plan. If you prefer, you may email us to make arrangements for a meeting. From our office in Pittsburgh, we serve clients across Allegheny County.