4 Things to Know When Changing 529 Plan Beneficiaries
Some people like to use one 529 college savings plan for multiple children, or end up having left over money in one that they want to use later on. If you’re one of those, here are 4 important points you should consider before changing the beneficiary on your 529 plan:
- The account owner keeps control. Even though the funds can only be used for the beneficiary’s education, the beneficiary doesn’t have control of the account.
- Plan ahead when using the same account for multiple children. It’s usually not a good idea to save for multiple siblings in one account, unless their ages are far apart enough thatone has finished college by the time the younger sibling is attending.
- Only family members can withdraw money from a 529 plan without penalties. If you aren’t related to the original beneficiary of a 529 account, you will incur a tax penalty when you withdraw the funds.
- Consulting a CPA may be a good idea. Some cases are more complicated than others and consulting a CPA on how to change the beneficiary without resulting in extra taxes.
To read the full article, click here.Posted by The GradSave Team
Wed, November 14th, 2012 @01:58PM