Building legacies that honor clients’ intentions
Whether it’s providing income for a spouse, educating children and grandchildren, or leaving money to a charity, legacy planning can ensure that assets are protected and preserved for the intended use. Working with clients’ tax and legal professionals, we develop a plan to maintain their lifestyle while building a legacy.
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Through our affiliate Raymond James Trust, N.A., we offer trust structures, including charitable-giving tools that may also feature tax advantages. Whether the goal is to minimize estate taxes, help ensure funds for the future, provide for a loved one or spell out exactly the wishes to be carried out, we help.
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Giving can not only help the organizations our clients choose, but can also generate personal tax benefits and advance their wealth management plan. We help with strategies that include private family foundations, charitable trusts, charitable gift annuities and donor-advised funds.
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Funding a child’s or grandchild’s education can be a rewarding use of wealth. We help plan to provide for this opportunity with investment vehicles such as 529 college savings accounts and specialized trust vehicles.
Earnings in 529 plans are not subject to federal tax and in most cases state tax, as long as you use withdrawals for eligible college expenses, such as tuition and room and board. However, if you withdraw money from a 529 plan and do not use it on an eligible college expense, you generally will be subject to income tax and an additional 10% federal tax penalty on earnings.
As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. Investors should consider, before investing, whether the investor’s or the designated beneficiary’s home state offers any tax or other benefits that are only available for investment in such state’s 529 college savings plan. Such benefits include financial aid, scholarship funds, and protection from creditors. The tax implications can vary significantly from state to state.
