Above the Fold

Tax Changes May Be Looming, but There Are Still Wealth Transfer Loopholes 

If you haven’t done so already, now might be a good time to have a discussion with your financial advisor about how potential tax modifications could impact your investment and wealth transfer plans. The good news is that one tax-advantaged savings plan, intended for educational purposes, could prove to be a useful tool in your financial arsenal. 

The Section 529 plan comes in two flavors. The first is the prepaid tuition plan, which allows the saver to lock in current tuition rates at a designated college and pay that cost over time. Savings plans under Section 529 are the second type. These accounts can grow tax-deferred and withdrawals are tax-free when used toward qualified education expenses. These plans are also simple to set up and the initial funding can be 10-times the annual max contribution of $15,000, or $150,000 per beneficiary. That initial contribution is also not penalized when it’s withdrawn, even if it’s not used for education. But the key to the 529 is the fact that money can be moved from beneficiary to beneficiary with little restriction (within the same family), making it a keen wealth transfer alternative if estate taxes rise and estate tax exclusions fall. And structured properly, it’s also an exceptional way to fund educational goals for future generations.

If you are a client of Westwood Wealth Management, contact your Westwood Private Wealth Advisor with any questions.

Three Things 

1. Amazon’s Latest “Experiment” Aims to Share Your Bandwidth With Neighbors – On June 8, Amazon is launching its “Sidewalk” wireless mesh service. The controversial program will share your internet bandwidth with others who might not have connectivity and vice-versa. The experiment is aimed at improving the range and reach of all sorts of devices, but could also increase vulnerability and security breaches. Max monthly bandwidth sharing will initially be capped at 500MB, but you can opt-out of the program by deselecting Amazon Sidewalk in the Alexa app (which is turned on by default).  
2. The Domestic Travel Boom Has Officially Arrived – Memorial Day saw a boom as 6 million people are expected to have traveled through airport security. AAA travel data projects a 60% jump in travel greater than 50 miles for the holiday weekend. During the first two weeks of May, TSA airport screenings were up 750% compared to 2020, but still lagged 35% compared to 2019. And while 21% of aircraft are still in storage, most airlines expect to be at near-full operational capacity by the end of June. 
3. Some Areas Look to Ban Natural Gas in Homes – Cities across the U.S., including San Francisco, New York, Denver and Seattle, are considering measures to phase out or prohibit gas service in homes. While homes and businesses account for nearly 13% of America’s greenhouse gas emissions, natural gas is a cheap, efficient way to provide heat (especially during extreme weather events) and is a preferred means of cooking for many. All-electric homes are also typically more expensive to equip. Several states are already enacting counter-measures to prevent metro areas from instating natural gas bans. 

Did You Know? 

We Remember

Dating back to the Civil War, Americans had begun holding organized tributes to the fallen men and women who fought bravely to advance and protect our nation. In 1868, General John A. Logan called for a national “Decoration Day” on the 30th of May to decorate the gravestones of soldiers across the country. As time passed, states would hold their own springtime tributes to honor those lost. But it wasn’t until 1968 that Congress formally passed the Uniform Monday Holiday Act that established Memorial Day as the last Monday in May and deemed it a federal holiday. Westwood remembers those who have made the ultimate sacrifice for our nation and appreciates those who continue to serve in order to maintain our security and way of life.