Financial Gift Giving Etiquette

Financial Gift Giving Etiquette

June 14, 2019
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Financial Gift Giving Etiquette

The amount of invitations for graduation parties or birthday parties this summer can make your to-do list a mile long.  We have some thoughts on how to take some stress off yourself and the host by simplifying the gift giving process. Waddell & Reed has a great article about setting up a 529 plan for a child. Here is a snippet…

Here is what you should know about 529 education savings plans:

  1. Flexible and transferableWhen you open a 529 plan, you are the “owner” of the account for the benefit of your selected beneficiary, such as your child, grandchild, niece or nephew. Should the designated beneficiary not need financial assistance for college, the beneficiary can be changed.
  2. Not just for college: While funds from 529 plans can be used for qualified higher education expenses, including tuition, fees, room and board, books, computers and other required materials, starting in 2018 they can also be used for similar expenses associated with public, private or religious primary and secondary education.
  3. High contribution limits, no income restrictions: Plan contributions can be made up to a maximum balance – which differs by state and/or plan – for all program accounts per beneficiary. Plus, there are no income restrictions on the account owner.
  4. Anyone can contribute: Any U.S. citizen – including relatives and friends – can contribute to a 529 plan for a selected beneficiary. Some grandparents might consider 529 plan contributions as birthday gifts.
  5. Estate planning advantages: Especially important for grandparents or other relatives, contributions to a 529 plan account are excluded from the donor’s taxable estate for federal tax purposes (assuming the donor is not the beneficiary). Read the full article on our website.1

529s can be a great investment for the future.  Whether you are attending a baby shower, preschool graduation, or Communion you may want to consider a 529 account as a gift. To learn more about 529 plans contact Etiquette Financial Partners here.

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1Investors should carefully consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing. Specific information is available in each plan's official statement. Investments into a 529 plan are not guaranteed and involve of risk. It is possible that the value of your account may be less than the amount you invested. Also consider whether your state offers any 529 plan state tax benefits and whether they are contingent on joining your own state's 529 plan. Other state benefits may include financial aid, scholarship funds, and protection from creditors.

This information is not meant as financial or investment advice pertaining to your personal situation. The selection of appropriate investment, insurance or planning options and/or strategies should be made on an individual basis after consultation with appropriate legal, tax and financial advisors. Nothing contained herein is intended as a solicitation or an offer to buy or sell any product or service mentioned and they may not be suitable for all investors. Securities offered through Waddell & Reed, Inc., Member FINRA/SIPC. 06/19