- Custodial Accounts (UTMA)
- 529 college savings plans
- Coverdell Education Savings Account (CESA)
- Traditional/ROTH IRAs
- Personal Investment
- Zero Coupon Bonds
- Savings Bonds – Series EE & I
Each of these has differing uses, benefits, and drawbacks.
- Who can contribute?
- Contribution limit?
- Who has control?
- Qualified distributions?
- Income Tax considerations
- What happens to the unused balances?
- Financial Aid considerations
- Gift and Estate tax benefits
- Contributions may be irrevocable gifts
- Bonds may not receive the tax-free benefit for education expenses if issued incorrectly
The list goes on. Are you confused yet? When a client asks me about a complicated financial decision such as this, I always recommend they seek advice from a Certified Financial Planner. Planning of this type requires a complex review of your assets and your intent to assure the plan you put in place will fulfill that intent and is a sound financial decision.
I work with Certified Financial Planners regularly and can provide referrals upon request. Please contact me for more information and to discuss how your estate planning documents may be affected by this type of education planning.
Colleen J. Watters
Estate Planning Attorney