大学教育融资方案值得考虑

Savings Vehicles AlternativeSources of Funding Begin Planning Today YOUR WE ALTH JOURNEY—NAVIGATING LIFE’S FINANCIAL MILESTONESFinancing a College Education: Options to Consider Tips for developing the best strategywhile keeping your financial goals intact Among its many benefits, a college education can have a significant impact onfuture earning potential. It is an important investment. It is also becoming amore expensive one as increases in college costs continue to outpace inflation. Private WealthManagement A 529 plan also comes in the form of a prepaid tuition plan,allowing you to pay for future tuition at today’s prices.However, if the beneficiary chooses a school not included inthe plan, there may be uncertainty about how the value of Savings VehiclesThe cost of college education has risen faster than inflation nearly every year over the past four decades. And whilecolleges costs have risen more slowly over the past 10 years,they continue to increase. According to the College BoardTrends in College Pricing 2024, the published inflation-adjusted (real) costs of tuition, fees, and room and board Among the advantages of a 529 plan is the ability to front-load the plan by using up to five years of your gift tax annualexclusion ($19,000 for 2025). That adds up to an $95,000immediate contribution—$190,000 for a married couplesplitting the gift. The contribution is removed from yourtaxable estate, yet you keep control over the 529 plan. Be Whether you need to build up assets to finance yourchildren’s or grandchildren’s education or you expect to paytheir education costs out-of-pocket, you may benefit from 529 College Savings PlanA 529 savings plan allows parents and grandparents to set aside money for a child’s college education, offering tax-deferred growth and tax-free distributions for qualifiededucation expenses such as tuition, fees, books, room andboard. Since 529s are state-sponsored saving plans, some Contributions beyond the annual exclusion will be appliedtoward your lifetime gift and estate tax exclusion of $13.9 You are able to change the beneficiary to certain familymembers in the same generation, such as a sibling or firstcousin of the beneficiary or yourself if you are consideringgoing back to school. This will allow you to avoid taxes andpenalties if the initial beneficiary decides not to pursue You can contribute only cash, not securities, to any stateplan you select. Each state sets the contribution limits andoffers investment options, varying in type, risk, and timeframe. You have the ability to reallocate assets twice a year.You retain control of the investment account and name the Private WealthManagement the current beneficiary, such as his or her child, couldtrigger gift and generation-skipping transfer (GST) Creating a trust is a way to transfer an unlimited amountof assets that can be used to fund a child’s or grandchild’scollege education while maintaining some control overinvestments and distributions. A wide variety of options are Note:Federally tax-free withdrawals are allowed to pay forup to $10,000 of K-12 tuition. State tax benefits are availablefor expenses that the state deems as “qualified,” which may With an irrevocable trust, for example, assets transferred tothe trust are removed from your taxable estate. The trustee,named by you, maintains control over how the assets areinvested and when they are distributed to the beneficiary. Uniform Transfers to Minors Accounts (UTMAs)An UTMA allows you to transfer assets to a minor by opening a custodial account for them. The assets can beused not only for education expenses, but for any purposethat will benefit the child with the exception of basic Trust income (in non-grantor trusts) that is not distributedis subject to income taxes — based on special tax bracketsfor trusts, where the rates climb much more rapidly than Assets transferred are removed from your taxable estate,yet you maintain control over how the assets are investedand distributed until the beneficiary reaches the age of Coverdell Education Savings Accounts (ESAs)Similar to IRAs, Coverdell Education Savings Accounts There is no limit on how much you can transfer to anUTMA. Transfers are eligible for the annual gift taxexclusion ($19,000, or $38,000 for married couples splittinggifts in 2025). Those in excess of your exclusion will use uppart of your lifetime gift tax exemption or be subject to gift allow you nearly unlimited investment options and theability to reallocate assets at almost any time. Similar to Unfortunately, the annual contribution limit is just$2,000, and that limit is gradually phased out down to $0based on relatively low income-based limitations. So, anESA likely will not be sufficient to finance all of your The minor is subject to income tax on a UTMA account. Ifincome is above $2,700 (for 2025) the “kiddie tax” applies. Private WealthManagementwilliamblair.com Direct tuition payments are not subject to gift or G