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A concern for most parents in putting together an estate plan is ensuring that their children (or grandchildren) will have enough funds set aside for education. With rising tuition costs outpacing the rate of inflation, education expenses can claim an ever greater portion of your net worth. Whether it is making sure that there is money available to provide a college education for one child or grandchild or trying to put something together to insure educational opportunities for more than one generation of a family, we are available to help prepare a plan which will pay off in maximizing the amounts available in the most tax-advantaged manner while safeguarding the funds you wish to set aside for your child’s education.

Ways of paying for education costs include:

1. making direct payments to the education institutions by utilizing the annual gift tax exclusion under Internal Revenue Code section 2503 (e);

2. payment using Education Savings Bonds;

3. 529 College Savings Plans;

4. Coverdell Education Savings Accounts;

5. Utilizing various tax breaks for education such as the Hope Scholarship Credit and Lifetime

Learning Credit and income tax expense deductions.

Other options include setting up custodial accounts under the Uniform Transfer to Minors Act; and the setting up of special Minor’s Trusts such as 2503(c) Trusts and “Crummey Trusts.” The main advantage of minor’s trusts are their great flexibility. They not only offer a way to pay for education expenses but can also be used to pay for other needs which your child may have. They also provide asset protection to both you and your children and can qualify for the annual exclusion gifts. These trusts can also be coordinated with 529 plans and other education funding methods.

We also advise on the various ways to qualify for student financial aid.

We can help you identify all the available resources (including potential loans, scholarships and family gifts) and your objectives regarding your child’s education, and work with you to structure the best plan to pay for the education of your children.

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