Education and Legacy Planning
529 Educational Savings Plans
Did you know that 529 Educational Savings Accounts can be used for other education expenses besides tuition at Colleges and Universities?
- Private K-12 Schools
- Accredited Colleges
- Accredited Universities
- Trade Schools or Vocational Programs that are qualified for Title IV Federal Student Aid-Federal School Code Look Up Tool-cosmetology, technical colleges, culinary school, and even a golf academy
- Registered Apprenticeship Programs with the Department of Labor-any employer can register their program through the Department of Labor site
Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) custodial accounts are investment accounts where the minor owns the funds received as a gift, but the donor may serve as custodian and has complete control of the account until the minor reaches the UTMA/UGMA age of termination (can range from age 18 to age 25 depending on the state), at which point the custodian is required under the law to turn the assets over to the former minor.
Because the assets are considered the property of the minor, a certain amount of the investment income will go untaxed while an equal amount is taxed at the child’s tax rate, instead of the parents’ rate. It is important to discuss the taxation on UTMA/UGMA accounts with a trusted tax advisor to see if they are right for you.