With the passage of President Trump’s Tax Cuts and Jobs Act (TCJA), an old tool in the tax- and estate-planning toolbox has received an update – the 529 plan. Named for Internal Revenue Code 26 U.S.C. § 529, these are generally tax-advantaged savings plans that encourage saving for future education expenses of a designated beneficiary. Since 2001, qualified distributions from 529 plans have been exempt from federal income tax when used for qualified higher education expenses.
The biggest change to 529 plans that the TCJA brings is an expansion to include K-12 public, private, and religious school tuition and other expenses. Starting January 1, 2018, families will be able to withdraw up to $10,000 per year from a 529 plan to pay for pre-college students’ qualified school expenses.
The greatest immediate value will be for parents who already have funded plans, as they will be able to reap the interest and tax benefits of those prior contributions before their children begin college. Nevertheless, parents of school-age and younger children will still be able to see benefits from the change, as contributions to 529 plans are tax-deductible. Withdrawals from these plans are permitted for non-qualified expenses, such as medical expenses or unrelated living expenses, but such withdrawals are subject to income tax and a 10% early-withdrawal penalty on the gains. This penalty is waived under certain circumstances, such as the death or indefinite disability of the beneficiary.
529 plans are administered by each state individually, and Colorado currently has four plans, although this may change with passage of the TCJA. The four current plans are: Direct Portfolio College Savings Plan, Scholars Choice Savings Plan, Smart Choice College Savings Plan, and Stable Value Plus College Saving Program. Each of these is managed by College Invest, a division of the Colorado Department of Higher Education.
The landscape of tax- and estate-planning is constantly shifting, and it’s important to get the best legal and financial advice you can. Let the professionals at Toussaint & Coaty, P.C. help you with your legal planning needs.
Domestic Relations, or Family Law cases, in Colorado can take several forms. Dissolution of Marriage is an original divorce proceeding. Allocation of Parental Responsibilities (or “APR”) is how unmarried co-parents obtain court orders regarding their children. Modifications of child support, parenting time, decision making and other matters can be filed after a completed Dissolution or APR matter. These “post decree” actions also require the mandatory disclosures required in original Dissolution or APR actions.
Mandatory disclosure is a Colorado family law term referring to the production of a financial affidavit and financial documents required pursuant to Colorado Rules of Civil Procedure Rule 16.2. This rule applies to all initial and post decree family law actions like divorce, allocation of parental responsibilities (custody for never married co-parents), and all later modification actions. A financial affidavit must always be filed in cases to which the rule applies, and a child support worksheet is also required in cases involving children and child support.
Each party must gather and disclose to the other party the documents required by the mandatory disclosure rule and provide a certificate of compliance with the mandatory disclosure rule representing to the court what types of documents they have provided to the other party. Mandatory disclosure documents include pay stubs, tax returns, credit card statements, bank account statement, deeds, promissory notes, self employment/business documents and similar financial documents.
In an original or post decree matter the rule requires that mandatory disclosure be completed within 42 days of service of the initial pleading unless there is an objection to the disclosure, agreement of the parties to a later deadline or an order of the court extending this deadline.
The parties have a continuing duty to update their financial affidavit and documents whenever there is a material change in their financial circumstances.
If you have questions about your family case or the requirements of mandatory disclosure contact the experienced attorneys at Toussaint & Coaty who can help you through this extremely difficult and emotional time in your life.
Married clients who are planning their estates when they have previously married have unique challenges and issues. This is especially true if there are children of the current marriage, the past marriage or both. Usually the re-married parents want all their children to inherit a portion of the estate. It becomes even more complicated because people are living longer and “gray divorce” or divorce among spouses who are over 50, is the fastest growing divorcing group. Add in the fact that older people usually have more significant and substantial assets, it makes a great deal of sense to work with us to go over all of your estate planning needs. After meeting with us, many clients learn that a trust may be the best way to achieve estate planning goals. Likewise, some clients learn that a trust is simply too expensive and is not necessary to achieve the goals the client has defined.
Regardless of where you are on the wealth spectrum, it is important to sit down with a quality estate planning attorney to make sure your estate plan is current, accurate and achieves your goals.
Why not use an online service to draft your important estate planning documents? While it is true that online services are extremely inexpensive and fast, you get what you pay for…a subpar product that may not fit your needs. Online services are incomplete services; they have severe drawbacks, and can even contravene your estate planning goals! Without an attorney to review your assets, family situation, recent life changes, Colorado law and other factors, you could be making blunders in estate planning by using an online service without even knowing it.
Only a live attorney can recognize the individual needs that affect your estate planning documents, unlike a computer program or website. Attorneys do not just take your identifying information and put it in a form; they get to know you, your individual situation, your family situation and your estate planning goals, and then develop a plan, with you, to accomplish those goals.
Live attorneys can also alert you to tax consequences of certain estate plans, beneficiary designation issues, how non-probate transfers can be used in your estate plan and other factors specific to you that can affect your plan. An attorney can analyze the character and value of your assets and advice you on how to accomplish your goals for those assets. Speak with a live, Colorado licensed attorney who can help you develop a plan that is specific to you.
Finally, how safe do you think your personal information is on an online estate planning site? Is the online site secure? Is there a human being who is responsible to you for protecting your privacy and taking care of your needs? Colorado licensed attorneys have an ethical obligation to protect your privacy and can be punished, up to and including disbarment, for failing to protect your private information. We take your privacy seriously. Speak with one of the experienced professionals at Toussaint & Coaty about your estate planning needs.
Colorado Homeowner’s Associations and other common interest ownership communities have had a spotted reputation in recent years. In an effort to manage these issues, some Associations have started to hire professional managers, who are now required to obtain a license prior to hire. House Bill 15-1343 modifies the regulation of persons who, for compensation, manage the affairs of a common interest community on behalf of a unit owners’ association (community association managers) by:
- Requiring a license for a community association management apprentice;
- Amending the definition of “community association management” to specify the practices that relate to the management of a common interest community;
- Exempting executives who employ or supervise an individual who performs community association management and independent contractors from being licensed as community association managers;
- Providing that an entity may obtain a license by designating a manager who qualifies for a community association manager’s license to manage and supervise all of the entity’s licensed activity;
- Modifying the examination requirement by conditioning the grant of a community association manager’s license on an applicant passing two separate portions of an examination, referred to as the “general portion” and the “Colorado law portion”; and
- Changing the fund used for implementation of the regulation of community association managers from the community association manager licensing cash fund to the division of real estate cash fund and repealing the former.
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