You might have heard the nightmare stories about people with college degrees who end up owing more than a hundred thousand dollars to the government in student loans. That is becoming such a common scenario, that the majority of Americans now support the idea that public colleges should be tuition free.
However, tuition free college is probably not a realistic scenario in the near future.
Families who do not want their younger generations to have to pay back gigantic student loan debts are making plans to have parents and grandparents pay for school.
There are a couple of different options as the Wills, Trusts & Estates Prof Blog discussed in “Funding Education? Consider A Trust Instead of a 529 Plan.”
A 529 plan is a great way for families to save for education.
It allows for tax-free investments for educational expenses. However, the investment opportunities can be somewhat limited and people can only sign up for plans that are made available from state governments.
People with more money would be better off using trusts for educational expenses.
With trusts there are more investment options and if the money is not needed for educational expenses, then it can more easily be used for other things.
If you would like to make paying for the education of future generations of your family part of your estate, then talk to an estate planning attorney about the best way to do that.
Reference: Wills, Trusts & Estates Prof Blog (Nov. 16, 2017) “Funding Education? Consider A Trust Instead of a 529 Plan.”