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YourHub.com \\ Golden \\ Stories \\ Tips & Techniques \\ Family Advice

Planning for your family's future

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Contributed by: Mike Herman on 4/29/2008

As a parent or grandparent, you face many important estate planning questions. How will you provide for your child's or grandchild's future? What is the most tax-effective way to transfer assets to your child? Will your child be ready to manage the assets he or she receives from you? While these questions are not easy to answer, proper planning can help you provide for your family's future and limit the tax consequences.

Each year, you may give up to $12000 to each of your children (or to anyone else) without triggering any federal gift-tax consequences. The $12000 amount doubles to $24,000 if you and your spouse agree to "split" your gifts. Making use of this gift-tax annual exclusion may allow you to reduce the size of your taxable estate and secure your child's future.

Like many people, however, you may be apprehensive about giving large sums to your children and grandchildren, especially while they are minors. Fortunately, a properly structured gift can adress your concerns. A trust is one possibility to consider.

With a trust strategy, you could direct your trustee to use the trust income and principal for your child's benefit until your child reaches age 21. Then, your child would have the right to withdraw all the trust assets, but only for a brief period of time. If your child doesnt exercise that right, trust benefits can continue until a later date which you specify. If all requirements are met, your gifts to the trust will qualify for the annual exclusion.

Michael Herman is President of Golden Wealth Solutions and a Financial Advisor. If you have any questions or would like information on planning for your family's future, please call 303-456-1913.

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CONTRIBUTOR INFORMATION

Mike Herman

Wheat Ridge , CO

Mike Herman has posted 3 stories and 0 comments since joining on 2/19/2008. Mike Herman 's average story rating is 0.

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