Re: College 529s as estate tax tool -- Insurance Forum

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Date Posted: Fri, June 21 2002, 9:52:08
Author: Jim Corr
Subject: Re: College 529s as estate tax tool
In reply to: Art Rossetti 's message, "College 529s as estate tax tool" on Thu, June 20 2002, 17:20:34

>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.

Not sure I followed you. I thought you could only open 529 plans on someone who was 18 or younger (that would leave out the 529 plans on the grandparents). Second when the grandparents die why would their son get the money? Wouldn't it still be in the account for the benefit of the grandchildren?

Jim in Riverside

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Replies:

Re: College 529s as estate tax tool -- Semper Fidelis, Sat, June 22 2002, 13:58:22
- Re: College 529s as estate tax tool -- Keith Busmente, Sat, June 22 2002, 14:54:44