Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next
Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Re: Gift to 529 plan Date: 10/6/2012 11:23 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
wrjohnston91283:

<<<You own the 529 plan. A gift to the 529 plan is a gift to you, NOT your son. Owners can always withdraw funds from a plan.

If the gift is to your son, then you would need to open another 529 plan account in which your son was both the owner and the beneficiary.

Putting your son's assets into your 529 plan is converting his assets.>>>

"I looked into this some more."

Ok.

"Fidelity had two options when I opened the account. Individual or custodial. They point out that individual is "This is the most common type of 529 plan account. It enables an individual to save for qualified higher education expenses for a designated beneficiary." I picked this one based on the description."

Ok.

"Instead I should have picked custodial."

Perhaps.

"I'll open a new account as a custodial account."

This may not be issues for you, but at least two things for you to think anbout.

If you open it as custodial, then the money is your son's money.

1. When he hits the age of majority, he will control withdrawals, including choosing to withdraw for non-educational use, with tax penalty, and buying fast cars or women, or any of a host of other things.

2. If you might at all be expecting need based aid, the federal methodology uses 35% (IIRC) of chlild's assets and 5% (IIRC) of parents assets in calculating EFC (Expected Financial Contribution) toward school. If your parents owned the account, it would not even be reported on the FAFSA, and the account you own will count as a parent asset.

The FAFSA from and instructions and explanations ar available online if you wish to verify.

Regards, JAFO
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement