On November 21, 2017

Remember when your baby was just an infant and you thought he/or she would break like dropped china or porcelain? And then you saw them run right into a glass door and bounce off like a rubber ball and bounce back for more. It was probably back then that you first gave some forethought into getting yourself an insurance policy for their benefit or even an estate plan, in case something accidentally happened to you. But, like many well-laid plans, creating an estate plan or even a trust for the kids was put on the back burner.

When is the right time to set a plan in place to take care of your children, so they are taken care of in the event something unexpectedly happens to you? Probably, right now, so that you don’t put it off again, when later could be too late.

Creating an Estate Plan with Trusts in Colorado for Your Kids

Estate Planning Tools for Funding Your Baby’s College | Denver Estate Planning Attorney

Estate Planning Tools for Funding Your Baby’s College | Denver Estate Planning Attorney

Nearly everyone needs an estate plan to pass on their legacy, fortune, and property to future generations. Here are some things an estate plan will guarantee for your kids:

  • You can state a preferred guardian for your children.
  • You can also name temporary guardians, which will enable you to time-share your children if one guardian is a busy person. That way there’s a reliable backup to your primary appointed guardian.
  • You can establish a healthcare power of attorney, if for some strange reason both your children and you were in some kind of debilitating accident and you were incapacitated.
  • You can include HIPAA directives that authorize certain family and friends to call hospitals and doctors to find out if your child has been hospitalized; and, if so, how they are doing.
  • You can also leave detailed instructions on how children should be raised, including certain values, parenting methodology, religious upbringing wishes, etc.

Creating Trusts for Your Children’s College

Trusts are designed to help avoid estate taxes and help manage your money disbursements to your benefactors. So, setting up a trust for your child’s college is a great way to take care of your kids, and it is a way to be fiscally responsible. The following are some factors to keep in mind for creating a college trust:

  • Trusts require larger amounts of money to establish and may be expensive to manage.
  • Trusts require separate tax returns.
  • Trusts, however, will almost certainly disqualify your child from applying for financial aid.
  • Section 2503(c) trusts are common tools used for financing college for kids. They allow a designated trustee to manage the funds until the child reaches 21 years of age, which is when they can tap into the remaining principal.
  • Crummey trusts allow parents to set up life-long gifts to their children, which are free from estate taxes or gifts as long as the amounts are less than $14,000 (under the IRS guidelines established for 2017).
  • Crummey trusts allow beneficiaries to tap into the funds during an established distribution time frame, and don’t put a mandatory age restriction on when the principal can be used. A Crummey trust can also be used for multiple beneficiaries, in the event you have more than one child going through college.
  • If you can’t afford to start a trust, then you might consider a custodial account, which allows you to set up set up college saving accounts for the same reason as a trust.

Contact a Denver Estate Planning Attorney at JR Phillips & Associates, PC

Are you ready to discuss options for your child’s college saving plan? If so, contact our Denver Estate Planning Attorney at JR Phillips & Associates, PC. Our professionals will go over all financial options for funding your child’s future and college tuition. Our Denver estate planning attorney will provide competent, caring, and professional service, while providing them with the highest quality of estate planning services at affordable rates.

To set up a meeting to start going over all the excellent options available for taking care of your child’s education and the well-being of your whole family should something happen to you or your spouse, call us today at (303) 741-2400 or email us using the contact form at the top of this page.

We have offices in Denver, but we’ll represent those located in the southwest and southeast Metro Area, including Highlands Ranch, Littleton, Castle Rock, Parker, Aurora, Greenwood Village and Englewood.

 

 

 

Categories: Estate Planning, Estate Taxes, Guardianships & Conservatorships, Medical Directives, Powers of Attorney, Trust Administration, Trusts