Tax & Estate Planning Benefits of 529s
529 Savings Plans were created to encourage saving for college expenses by including specific tax advantages for account owners. These same tax benefits may also be applied for estate planning and succession purposes.
While funding your child’s or grandchild’s college education you can also reduce the size of your taxable estate. For example:
Contributions to a 529 plan are considered a completed gift for federal gift and estate tax purposes, therefore removed from your estate
CollegeInvest 529 plans are not subject to the ‘Kiddie Tax’
5-year gift averaging allows you to accelerate your gift giving within the maximum limits of the federal Gift Tax
Your taxable estate could be smaller, but your generosity would be greater. Below, we list some of the most common features and benefits of 529s that may apply to your unique savings goals and plans.
But first, a word of caution: your savings intentions and plans are suited to your specific life situation, and the tax laws are complicated. We strongly advise you to consider talking with your banker, tax consultant, or a financial advisor for the specific rules and implications to your decisions.
To learn about CollegeInvest’s 529 program, its objectives, risks, charges, expenses, limitations, restrictions and qualifications regarding the program's benefits and potential tax advantages, please read and consider carefully the Plan Disclosure Statements (PDS) available at www.collegeinvest.org before investing. Also, check with your or your beneficiary’s home state to learn if it offers tax or other benefits for investing in its own plan.
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