Overview
Talking about college savings isn't just about crunching numbers for tuition—it’s about helping parents tackle one of their biggest dreams and fears at the same time. When advisors bring education funding into the big-picture financial chat, it keeps families from accidentally draining their retirement savings just to pay for textbooks. Show parents how today’s choices can set their kids up for success without throwing the rest of their lives off track by connecting college planning to everything else—like taxes, savings, and everyday spending. Financial experts can help clients feel confident and organized heading into the future.
Education Asset on an Asset-Map
To open a discussion of education funding, adding an asset representing the education vehicle on an Asset-Map is a best practice.
Add dependent: Ensure a dependent member is on the map (Actions menu, add Member).
Add a non-retirement Asset (Actions menu, add Asset)
Assign the Interested member of the asset to the dependent on the Essentials page.
Assign Custodian: On the Details page of the asset assign grantor/custodian to a parent or guardian.
This will apply two tiles on the map: a white tile assigned to the dependent and a yellow tile indicating that the asset is controlled (or managed) by another. This does not double-count the asset on the balance sheet.
Account Type Setting on the Details Page
Use the Account Type field on the Details tab of the asset on the Asset-Map. Select "529" from the list to inherit the desired default Target-Map™ Preferences tax percentage.
This will also set the asset to non-taxable on the Location report.
UGMA and Coverdell
Coverdell: A Coverdell Education Savings Account (ESA) is a tax-advantaged custodial account designed to help families save for elementary, secondary (K-12), and higher education expenses.
Uniform Gifts to Minors Act (UGMA): UGMA allows adults to transfer assets to minors without a trust. An UGMA does not have the tax advantage that a 529 has. Assign the custodian on the Grantor/Custodian menu on the Details page.
Education Target-Map
The Dependent Education Template attempts to pre-fill standard funding requirements for a dependent’s education need based on the financial professional's preferences.
Target-Map Preferences Dependent Education offers the starting point for the education funding requirements. By default, the Dependent Education Expenses line item is presented. Change the description and amounts to new defaults as you see fit. Add Custom Wants to expand spending desires. These become the default Education conversation. The specific Target-Map may be edited once it is run.
Helpful Tips:
The template assumes the event starts at age 18 (Duration of Contributions field) and lasts for 4 years.
The selection box for this Target-Map only displays members designated as "Dependent".
This Target-Map template uses hard-coded values that can be refined to suit the needs of the client.
Each requirement can be individually edited on the "What you want" page.
Don't settle for our default descriptions. Rename line item descriptions as desired in your Target-Map Preferences for your desired default Target-Map, or by customizing the specific Education Target-Map after it's been created.
Add more requirements using the Add Desired Cash Flow button on the "What you want" page in the Target-Map or set default talking points on the Target-Map Preferences page so they are generated every time.
Use the Start Age field only to define a one-time funding requirement at a certain age/date (leave the end age blank) on the "What you want" page.
Target-Maps recognize the financials relevant to the event and apply them to help fund the need. Additional funding may be applied by the advisor on the "What you have" page.
Double-check COLA, Start and End ages, and Loss to Tax values. Ensure they are aligned with the funding requirements and edit as needed.
New asset financials added to the Asset-Map will appear on a Target-Map's "What you have" page, but will not be applied to fund the need until the associated check box is checked.
By design, Target-Maps are independent from one another. Funding used by one Target-Map is not automatically removed from other Target-Maps.
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