529 Plans combine the best features of prepaid tuition programs, custodial accounts, and other tax deferred savings programs. Contributions for each beneficiary can be significant depending upon which state plan you join. What's even better is that you can contribute $65,000 ($130,000 for married couples) in one year without having to pay gift taxes, as long as no other gifts are made by you to those children over the next five years. These assets will also be removed from the donor's estate, thereby reducing potential estate taxes.1
1 The American Taxpayers Relief Act of 2012 passed in January 2013. The inflation-indexed maximum lifetime exclusion amount will be $5,250,000 in 2013.
Control and Growth
Even though you are removing these assets from your estate, you still get to keep control over the funds. There is also no age limit on the beneficiaries, and no time limit in which the funds have to be withdrawn. They can continue to grow tax-deferred until they are needed. If necessary, you can also change the beneficiary of the account as often as you would like. As long as the proceeds are used to pay for qualified higher education expenses, all earnings will be free from federal income tax.
744 W. Lancaster Avenue . Suite 235 . Wayne . PA 19087 I Phone: 610.293.8300 I Fax: 610.293.8399
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* Before investing in a 529 plan, please consider the investment objectives, risks, charges and expenses carefully before investing. The official disclosure statement and applicable prospectuses, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
Registered Representatives and Financial Advisors of Park Avenue Securities LLC (PAS), 7 Hanover Square, New York, NY . Securities products/services and advisory services are offered through PAS, a registered broker-dealer and investment advisor. PAS is an indirect, wholly owned subsidiary of Guardian. Financial Representatives, The Guardian Life Insurance Company of America (Guardian), New York, NY. Devon Financial Partners, LLC is not an affiliate or subsidiary of PAS or Guardian. Devon Financial Partners, LLC is not an independent registered investment advisor. The financial representatives of Devon Financial Partners, LLC are not licensed to sell insurance in all 50 states. To find out if an agent is licensed in your state, please contact Colleen Marzella at 610-293-8320. California Insurance License No. OC64350.
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