48 THE QUEENS COURIER • AUGUST 29, 2019 FOR BREAKING NEWS VISIT WWW.QNS.COM
coping with death
Passing it on to the future
One of the luxuries of fi nancial stability
is being able to pass on something to
your family.
Many parents hope that these fi nancial
gift s will open up new opportunities for
their children and grandchildren, helping
them pay for college, buy a home or
achieve other goals in their lives.
But building up this wealth is only part
of the answer when seeking to leave an
inheritance for loved ones.
Whether through life insurance, retirement
accounts or other savings and
inheritance methods, the decision you
make aff ects both the taxes owed on your
money and fl exibility your heirs will have
in choosing how to use the money.
If you want to make sure your inheritance
makes a real diff erence in the lives
of your heirs, consider these fi ve options
for passing on wealth:
Buy life insurance
When an estate owner passes away,
there are costs to consider. Funeral costs,
outstanding debts, mortgages and other
expenses need to be paid off before an
inheritance can be dispersed.
If you own a large estate, you may also
owe estate taxes on your savings.
A life insurance policy is typically used
to cover these expected costs, ensuring
that your benefi ciaries receive the amount
of wealth you’ve committed to them.
In most cases, the payout from life
insurance is also tax-free, providing additional
incentive to take out a policy.
Open a 529 plan
If you have children or grandchildren
who are likely to attend college, a 529
plan is a great investment vehicle to use
when passing on wealth. Consider handing
down recipes to younger generations
in your family
Th e contributions to these accounts are
tax-deferred, and if the funds are used for
college tuition or other qualifying costs,
they’re tax-free, too.
“Another benefi t of a 529 plan, for inheritance
purposes, is that you can frontload
your deposits, instead of dealing
with a fi xed annual limit,” said Michael
A. Lanotte, Executive Director & CEO
of the New York State Funeral Directors
Association.
“Th is gives account owners the fl exibility
to make large, immediate deposits as
soon as they have a wealth distribution
plan in place.”
Name benefi ciaries
If you have an IRA, 401(k) and/or Th rift
Savings Plan accounts, one of the easiest
ways to pass on this wealth is to name
a benefi ciary for these funds. Th is allows
the accounts to continue accumulating
wealth over time.
Once the account owner passes away,
the accounts can be divided up among
the benefi ciaries, in accordance with the
allocation amounts you’ve established for
each person.
Pay in advance
Funeral arrangements can challenging
for loved ones aft er a death. Creating
funeral plans is taxing on loved ones who
are already grieving.
One way to alleviate this fi nancial and
emotional diffi culty is to complete your
arrangements before you pass away.
“From a fi nancial perspective, pre-planning
creates peace of mind by eliminating
one of the costs that can crop up aft er
someone’s passing,” Lanotte said.
“And if it’s your funeral, this approach
also lets you choose the details of your
ceremony, which also helps your family
as they grieve.”
Arrange annual gifts
If you have a large inheritance you’d
like to pass on gradually over time, you’re
allowed to give up to $14,000 each year, or
$28,000 if you’re a married couple, to benefi
ciaries without having to pay any taxes
on that money.
Th ere’s no limit to the number of people
who can receive this gift , and no restrictions
on what type of relationships are
eligible.
If you’re likely to pay estate taxes on
your wealth, annual gift s can help lower
that tax bill, ultimately increasing the
amount of money you’re able to pass on.
When it comes to managing your endof
life fi nances, a little planning can go a
long way.
Meet with a trusted fi nancial advisor to
discuss your fi nancial circumstances and
identify the most cost-eff ective strategies
for passing on your wealth to the people
you love.
Courtesy NYS Funeral Directors
Association
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