The cost of tuition is rising at 6% per year. In twenty years the average tuition will be over $150,000. Let us help you determine how much you will need.

Ask Worldwide Wealth Management how the contributions can be used as an Estate Tax reduction strategy. We can help align your educational funding strategy with your overall estate plan. It's not too soon to get started.

Ask us about your options which include:

529 College Saving Plan

A tax-advantaged national college savings program authorized and created under section 529 of the Internal Revenue Code. Earnings grow tax-free and can be withdrawn free from federal income tax if used for qualified college expenses. The plan offers additional state tax and estate tax deductions too.

The law allowing for federal income tax-free qualified withdrawals is set to expire on 12/31/2010. Congress may or may not extend this law beyond this date.

Coverdell / Educational IRA

The Education IRA has been renamed to the Coverdell Education Savings Account (or "Coverdell ESA"). The Coverdell ESA was created to give individuals a method to save for a child's education (both elementary/secondary education (k-12) and post-secondary education (college, graduate school, vocational school, etc.)) and may be established for the benefit of any child under age 18. An Income Tax deduction may apply for qualified donors.

Uniform Gift to Minors Account (UGMA)

Laws adopted by most states allowing an adult to contribute to a custodial account in a minor's name without having to establish a trust or name a legal guardian. Thus, minors can have securities bought and money invested in their names, but the custodian is responsible for managing the funds in the account. The custodian has a fiduciary duty to manage the account prudently, but once the minor reaches the age of majority, he/she has complete rights to the funds in the account.

The assets are the legal property of the minor, and the parent has no legal control over the uses of the proceeds of the account. All withdrawals from the account are taxed at the minor's rate. Putting money into a UGMA account can negatively impact the chances for financial aid, since financial aid officers weigh children's assets much more heavily than parents' assets.

Uniform Transfer to Minors Account (UTMA)

UTMA Law which extends the Uniform Gift to Minors Act's (UGMA) definition of a gift to include real estate, fine art, patents and royalties.

Pre-paid College Tuition

A state-run college savings plan that typically allows earnings to grow tax-free at a guaranteed rate of return to ensure payment coverage for college course credits and overall tuition.

Taxable Brokerage Account.

A customer's account at a brokerage. There are three kinds of brokerage accounts. The most basic kind is a cash-management account, into which investors place money in order to make trades. There must be enough money in the account to cover the trade at the time of its execution (including both the price of the security and the commission), or the investor must be able to pay for the trade within three days (which is called the settlement date). Some brokerage firms accept credit cards to fund cash accounts, but most require cash or a personal check. Such an account is often a good substitute for a bank account.

A second, more sophisticated kind of brokerage account is a margin account, which allows an investor to buy securities with money borrowed from the broker. The Federal Reserve limits margin borrowing to at most 50% of the amount invested, but some brokerages have even stricter requirements, especially for volatile stocks. Brokerages charge a relatively low interest rate on margin loans in order to encourage investors to buy on margin. A third kind of brokerage account is a discretionary account, which permits the broker to buy and sell shares for the investor without first contacting the investor for approval.

Series EE Bonds.

A Savings Bond issued at a discount from par. All interest on the bonds is calculated semi-annually, but paid at maturity and exempt from state and local taxes. The federal tax incurred on the interest can be paid annually or deferred. Over the first six months to five years that such a bond is held, it earns interest at 85% of the average yield on six-month Treasury Bills.

After five years, it earns 85% of the average yield on five-year Treasury notes. There is no secondary market for such bonds, but they can be redeemed before maturity. At maturity, the bond will automatically enter extended maturity and earn interest according to rates at the beginning of that period. EE bonds will continue to earn interest for 30 years after they are purchased. Once they have reached maturity, EE bonds may be exchanged for Series HH bonds in order to continue to earn interest and further defer federal taxes. An individual can purchase up to $30,000 face value in savings bonds in one year.

Hope Scholarship

A new tax credit, based on qualified educational expenses for the first two tax years of post-secondary education.