College

Large Estate? Consider Gifting to Family

Published on: November 3, 2015 | By McCulloch & Miller, PLLC

Most people prefer to maintain possession all of their assets, letting them go to the next generation only after they have passed away. But if a family member feels that they have more than enough money and property and others in the family are in need or would benefit from having access to the assets, then the older person can make gifts during their lifetime. This can be very rewarding to the benefactors.

When it comes to giving methods, there are many ways to skin the cat. This was the subject of a recent article in the Columbus Dispatch, "Guide to Life: Pros and cons of leaving inheritances to relatives." Nevertheless, some of those giving methods are more tax savvy than others.

The article mentions three such ways:

College Assistance from Grandpa and Grandma

Published on: July 31, 2014 | By McCulloch & Miller, PLLC

Many grandparents want to help their grandchildren pay for college, but don't know the best ways to do that. Financial advisers who can show them how to make those contributions and reap financial advantages for themselves can shine.

Many families struggle enough to meet their current needs that they just do not have enough to pay for their children's college education. And with the costs of college education increasing year after year, it is almost impossible for students to make enough to pay for it with part-time jobs. Consequently, grandparents are starting to look into ways to help pay for their grandchildren's college education. They have already earned their wealth and are in a better position than the parents to pay for school.

A recent Reuters article examined how grandparents can pay for their grandchildren's college education while getting a tax benefit for themselves. The article, titled “YOUR PRACTICE-Selling grandparents on the perks of 529 college savings plans,”suggests a 529 college savings plan. This unique account can be used to contribute more than the yearly gift tax exemption into an account that a grandchild can later use for educational expenses. The accounts are not perfect as they could make a grandchild ineligible for financial aid.

When An Inheritance Hinders Financial Aid in Houston

Published on: December 12, 2013 | By McCulloch & Miller, PLLC

"Kids inherit money. We don't want it."

Sometimes too much inheritance all at once is a threat to moral development, it’s true, but sometimes a gift can threaten a college education by complicating financial aid.

As parents of the college-bound understand to a dizzying degree, financial aid is a difficult calculus of have and have not. It is often an entirely necessary salvation. Unfortunately, the types of income a parent or a student of a parent receive will have dramatic influences both on the availability of financial aid and the ease with which it is attained.