Aug 24 2017 37430 1

Dated: 08/24/2017

Views: 133

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.) 
Blog author image

Team H and L Miami

Team H&L Miami @ Real Estate Empire Group is a fast growing boutique Real Estate firm established in 2001. It began to revolutionize property sales as well as marketing through brokers, agents, and an....

Want to Advertise on this Site?

Latest Blog Posts

Feb 14 2020 37430 1

This information is brought to you by Henry & Laly SanzTeam H&L Miami at Real Estate Empire Group 2020 Real Estate Tips and Trends The new year and new decade will bring new

Read More

6 Beneficios De Tener Casa Propia

6 beneficios de tener casa propiaDurante generaciones tener una vivienda en propiedad ha sido la base del sueño personal, el fundamento de una familia feliz y la garantía de seguridad

Read More

Feb 13 2020 37430 1

This information is brought to you by Henry & Laly SanzTeam H&L Miami at Real Estate Empire Group In 94 Percent of Major Markets, Home Prices Up Across the country, home

Read More

Feb 12 2020 37430 1

Real Estate with  TEAM H&L MIAMI @ REAL ESTATE EMPIRE HOME VIDEOS LANGUAGE  FREE BUYING/SELLING GUIDES  #

Read More