Aug 24 2017 37430 1

Aug 24 2017 37430 1

This information is brought to you by

Henry & Laly Sanz

Team H&L Miami at Real Estate Empire

3 Smart Ways to Pass Wealth to Your Kids





Leaving money to your kids can cause unwelcome tax burdens unless you plan ahead and do so wisely. Financial experts at The Motley Fool, recommend three smart ways to pass your hard-earned wealth to your children:

Pass the cash – The IRS lets you give up to $14,000 tax-free per year to each child. You may be able to give them additional sums if they have tuition or medical bills. If you pay those bills -- by sending the money directly to the school or healthcare provider(s), not to your child -- then those sums can be tax-free gifts as well.

Spend it on education - You can help your child avoid student loan debt. One way to do this is with a Coverdell Education Savings Account (ESA.) As opposed to a 529 plan, a Coverdell allows you to make investment decisions. While that may not matter to a novice investor, it means that a seasoned market participant can maximize stock opportunities as they arise. Distributions from a Coverdell ESA are not taxed if they are spent on qualified education expenses. Caution: you are only allowed to contribute $2,000 per year per child. Furthermore, if the money isn't used for qualifying education expenses, it can be taxed -- which defeats the purpose of the Coverdell. But given that the contribution limits are low, while college costs are historically high, it’s unlikely to be an issue.

Use a Roth IRA - From an estate-planning standpoint, a Roth IRA has useful features. You can contribute to it as long as you have earned income, and you're not obligated to withdraw any money for as long as you live, so you can leave your investments to grow for the rest of your life. Your heirs won't have to pay tax on withdrawals so long as the account has been open for at least five years. After your death, your kids can take the proceeds as a tax-free lump sum, or allow the money to grow and compound for years. (They will, however, have to take required minimum distributions (RMDs) from the account beginning in the year you die.) 


Team H and L Miami Headshot
Author:
Phone: 305-458-3583
Dated: August 24th 2017
Views: 42
About Team: Team H&L Miami @ Real Estate Empire Group is a fast growing boutique Real Estate firm established in...

Property Search








RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

Apr 20 2018 37430 1 - 9 Home Improvements That Can Help
Apr 19 2018 37430 1 - What You Need To Know About
Apr 17 2018 37430 1 - In the Market for a House? A
Apr 16 2018 37430 2 - 6 Inexpensive Home Staging Tips

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

Real Estate Empire Group
10200 NW 25 St Suite A100
Doral, FL
305-912-8809
305-592-8989