Assistance to Loved Ones

We take a visionary multigenerational approach in planning for the long-term by building a roadmap to help you provide assistance to those you care most about

Aging and Mental Health including Dementia and Alzheimer's With Image of Road Across a Maze

What Activities Constitute Assistance to Loved Ones?

An important aspect to consider when assessing the seven pillars of financial planning is your desired level of assistance to loved ones.  This may encompass planning for those you care about, those who may live in your household, and your own activities which may impact them.

By planning for the assistance to loved ones, you prepare for a variety of situations that can occur during your lifetime.  This may include caring for children or grandchildren, helping adult children and other family members, paying for college, making major purchases, changes in marital status, caring for aging parents and keeping them safe, and even providing for the care for a loved family pet.  Below we cover some of the more popular ways to offer assistance to loved ones.

Tuition Planning / Education Expense / 529 Plans

Helping fund the education of a loved one may be a dream of yours and there are a variety of ways to accomplish this.  Some ways to provide future opportunities for your college-bound family members including UGMA/UTMA, 529 college savings plans and other avenues.

Benefits for education savings

  • There are no contribution limits
  • Transfers are completed as gifts and qualify for the annual gift exclusion
  • No restrictions are imposed on the use of distributions, as long as the distributions are for the minor’s benefit

Tradeoffs for educational savings

  • A custodial account is considered a student asset when calculating financial aid eligibility
  • Custodianship terminates as early as age 18, depending upon state law
  • Income taxes may be subject to Kiddie Tax rates

UTMA / UGMA Custodial Account

The Uniform Gift to Minors Act (UGMA) established a simple way for minors to own securities without requiring the services of an attorney to prepare trust documents or the court appointment of a trustee.  The Uniform Transfers to Minors Act (UTMA) allows an appointed custodian to manage the minor’s account.  In many states accounts do not terminate until age 21, though most states give 18-year-olds the legal status to open new accounts on their own.  Because minors typically become old enough to receive legal control of UTMA accounts during their college years, these funds give students a good way to pay their extra expenses.

Roth IRA’s for Children

The Roth IRA is most commonly used as a vehicle for retirement savings, however, the rules governing withdrawals provide for an advantageous exception when it is applied to qualified higher education expenses.  If a child plans to work part-time during the school year or during the summer break, he or she will have earned income and could potentially begin contributing to a Roth IRA, depending upon your state.

Inheritance or Windfall

Whether it be an inheritance of money, material things like a house, a big lottery win, or some other windfall , the steps are relatively similar.

  • Carefully weigh any strings attached to the windfall, as there may be limits upon the money or items you receive
  • You may have to adjust your current financial plans, since they were likely built on the resources you had prior to receiving the windfall
  • A large sum of money is much easier to spend than you might think, especially when making a well-deserved splurge on a big-ticket item
  • Watch out for hard-luck stories and business partnership schemes from family and friends.  Make sure you get your investment advisor’s help before making any investment decisions. Plus, for the sake of relationships, you’ll have someone to blame if you need to say “no”
  • Seek the advice of a trusted advisor before you make any final decisions about spending, saving, investing or paying off debt with your windfall, because there are many implications with each

Elder Care

If you are among the “sandwich generation,” you may be supporting your aging parents as well as your own children.  Managing senior living options and elder care for an aging parent, spouse or close friend can present difficult challenges.  We work with you to create strategies for managing the day-to-day affairs and medical decisions of those not mentally or physically able to do so.

Providing for the Care of a Pet

All U.S. states have enacted legislation authorizing the establishment of pet trusts.  If you are worried about a fur baby, you can formally plan for the care of your pet in your estate planning.  With a pet trust, a pet owner can designate an individual to care for a pet after his or her death and provide funding for the pet’s ongoing care.

Just knowing that you are prepared to help those that matter most to you can be a comfort. You’ll find many of these topics and more covered in-depth in our blog articles, on our podcast Your Money Momentum, and in our monthly Momentum Newsletter.

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