In February, Andrea Coombes wrote an article, titled “The Tax-Smart Way to Draw ‘529’ Funds”, about education tax benefits for the Wall Street Journal’s Investing in Funds report. The piece generated a number of follow-up questions from readers. Here’s one that came across Coombes’ desk:
“Before he died, my father contributed to a 529 on behalf of my daughter [his granddaughter]. Need anything be done now to ensure that my daughter is able to use these funds for tuition?”
To help answer this question, Coombes turned to John O. McManus, top-rated tax and estate planning lawyer who founded McManus & Associates. The firm offers income tax planning among its services.
Responding to the query, McManus explained, “Generally, 529s require account owners to name a successor owner.” If no successor is named? According to the article:
“Some companies automatically name the beneficiary as the successor owner…If the beneficiary is a minor, parents likely would be named custodial owners.”
For more “College Financing Q&A” with Andrea Coombes, read the Wall Street Journal piece here.
Flickr/Sean MacEntee: https://www.flickr.com/photos/smemon/4996958736
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