It is nearing college application time and college is on many people’s minds right now, especially for those who have to finance it! College tuition is continuously rising, both at public and private schools, and is projected to continue to rise over the years. Despite these increasing costs, higher education remains valued in our society and is a cost that many of us will face either as a parent or as a student ourselves. One tool used to help save for this future expense is a 529 college savings plan.
In setting up a 529 plan you may have designated a successor to the account, perhaps your spouse or a family member. However, this does not ensure that your account will smoothly transition into your estate if both you and your successor pass away. If the beneficiary of the 529 plan is a minor, a guardian will have to be appointed by the court to own the plan, and a separate account will have to be established for the minor. This ultimately results in more hassle and costs for your estate, and could disrupt contributions that your surviving family members may wish to continue to make to the 529 plan after your death. If you have already taken a step towards planning for your child/beneficiary’s future by setting up a 529 college savings plan, or any other college savings plan, we encourage you to go one step further and talk to our office about estate planning. We will integrate the two, to help ensure the proper succession of your 529 plan so that your child/beneficiary can receive the utmost benefit from your planning.