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Date Posted: Thu, June 20 2002, 17:20:34
Author: Art Rossetti
Subject: College 529s as estate tax tool

A person can take out a college 529 plan on himself, and his wife, and at death the proceeds are not part of the estate. With a 529 a person can gift $55,000 all at once, $110,000 per couple to EACH beneficiary. So les say gramps and gramma donate $11,000 to each of their 3 grand kids, and another $110,000 to each other, a total of $550,000. They name their son as contingent owner on their death. That means $550,000
goes to son's control ESTATE TAX FREE! That is a savings of $300,000 in estate taxes! Sonny can then take the money for himself, for the family farm or whatever, and pay tax on the growth plus a 10% penalty. Beats the tar out of 55% estate tax.

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