A 529 Plan is a type of account held at a bank that is designed to be used for educational purposes.

The 529 Plan account is established and maintained by a State or eligible educational institution to fund certain types of educational expenses. These expenses that are paid from the 529 account are exempt from tax—which is what makes them special and different from other accounts.

 

Qualified Educational expenses include the following at an eligible college or university:

  • Tuition & Fees
  • Books & Supplies
  • Equipment
  • Room & Board

Qualified Educational expenses include the following for qualified apprenticeship programs:

  • Tuition & Fees
  • Books & Supplies
  • Equipment

However, over the years, the laws have changed to also allow the following to be covered by the 529 plans:

  • Payment of principal or interest on a qualified education loan up to $10,000
  • Tuition for elementary and secondary public, private or religious school up to $10,000

The Plan can have multiple contributors. For example, parents and grandparents can all contribute to a singular 529 plan for a minor.

If you have minor children and you wish for them to have educational expenses, this may be a good tool for your family to utilize. Be sure to include your 529 Plan in your discussions with your estate planning attorney to obtain the maximum result possible and proper planning. It is important to mention 529 plan to your estate planning attorney since they will be able to let you know about the details on what are some things that you as a parent or a grandparent can and should consider.

We offer free fifteen minute consultations and would love to chat with you about your estate. 818-649-9110