“Trump Accounts – Focus on their merits, not branding,” Mickey Kim advises parents and grandparents in the Indianapolis Business Journal. “Importantly, the Treasury will provide a one-time $1,000 seed contribution for U.S. citizens born between Jan. 1, 2025 and Dec. 31, 2028.Parents, grandparents, friends and even employers can contribute a combined total of $5,000 per year until the year the child reaches 18.”
In working with our estate planning clients at Geyer Law, we’ve always discussed different options for assisting grandchildren, including:
- 529 education savings plans
- annual gift tax exclusions
- creating trusts to transfer wealth.
While we are not wealth managers or financial planners, we work together with those professionals to find the most tax-efficient ways for parents and grandparents to protect themselves while providing help to younger family members –both now and later. At the same time, as we’re advising clients about gifting to children and grandchildren, we want to make sure parents or grandparents aren’t undermining their own present and future financial stability. For that very reason, I appreciated two statements Mickey Kim made about the new Trump Accounts:
- Assuming an 8% return, that $1,000 government funding in a Trump Account could be worth $128,000 by age 63 (with no contributions by parents, grandparents, or anyone else)! The power of time, rather than of timing, is powerfully illustrated here.
- “The second benefit is behavioral. The quarterly statements from the Trump Account represent a built-in teaching tool, enabling money discussions between parents and children.
The estate planning process itself, we know, can be a “teaching tool”, because family conferences help acquaint the younger generation with the members of their parents’ advisory team, allowing parents to openly share with loved ones the values and assumptions – along with the issues – that have gone into their estate planning choices.
– by Nicole Eckert, Attorney with Rebecca W. Geyer & Associates
