How Can I Include Education Expenses in My Estate Plan?

It’s become a new reality for many that attending college is important to obtaining higher-paying jobs. However, it’s no secret that the cost of college and university tuition is incredibly expensive. As such, you may wonder if there is anything you can do to help a loved one pay for a higher education when the time comes. For many, establishing an educational estate plan is an ideal option. However, if you’re unsure what the options are or what to consider when establishing a plan, you’ll want to keep reading. In addition, you will discover why it is imperative to connect with a Medina County, Ohio Trust preparation lawyer to guide you through this of including education expenses in your estate plan.

How Can I Include Education Expenses When Creating a Will or Trust?

For many, one of the most common options to help establish a savings plan for a loved one is to invest in a 529 plan. This is a state-sponsored plan in which the funds can be used solely for educational purposes. However, this means that in the event of an emergency, the money invested in this plan cannot be used. As such, this is a strict and limited option to help pay for education expenses, but it may not be right for your family.

Though you may think that creating a Will is an ideal option, it’s important to understand the limitations this can have. In the event you should pass away before your loved one attends college, they can access the funds. It’s also important to note that if you pass away, your loved one will become the sole beneficiary of the funds, meaning they may spend irresponsibly. However, if they are going to college while you are still alive, they will be unable to access the money unless you change your Will. This can be an incredibly complicated process. As such, putting money in a Will to pay for education expenses is not recommended.

Establishing a Trust Fund may be the best option if you would like to leave funds to a loved one for their education. This allows you to directly send funds to the Bursar’s office of the university, which is considered a qualified transfer. As such, these payments will not incur the gift tax. Additionally, these funds are more flexible, meaning if an emergency should arise, your loved one can use the funds held in the Trust.

Should I Discuss Educational Estate Planning With an Attorney?

Unfortunately, taking educational expenses into consideration when planning your estate can be overwhelming as there are many options. That’s why it’s imperative to work with an estate planning attorney from Krause Law to help you through these matters. Our team understands that you want to prioritize the needs of your loved ones, which is why we can help you make the most informed decision to best benefit your family. When you need help, don’t hesitate to contact our office today to discuss your wishes.