Can I manage my own 529 account?

Can I manage my own 529 account?

With a Coverdell Education Savings Account, you can manage your own investments. You set up the account at a sponsoring institution, such as a bank or mutual fund. If you move the 529 account into a Coverdell, you pay tax and a penalty.

Who should be the account owner of a 529 plan?

Generally, the same person who contributed the money controls the Section 529 account. This doesn’t have to be the case, however. Someone else, such as a grandparent, could make a donation but name the child’s parent as the account owner, or a parent could establish the account and allow others to contribute to it.

Is it better for a parent or grandparent to own a 529 plan?

How Grandparent 529 Plans Affect Financial Aid. Overall, 529 plans have a minimal effect on financial aid. But, the FAFSA treats parent-owned accounts more favorably. For example, you report 529 plans assets as parent assets, which can only reduce aid eligibility by a maximum 5.64% of the account value.

Can the owner of a 529 withdraw money?

529 plan account owners can withdraw any amount from their 529 plan, but only qualified distributions will be tax-free. The earnings portion of any non-qualified distributions must be reported on the account owner’s or the beneficiary’s federal income tax return and is subject to income tax and a 10% penalty.

What happens when the owner of a 529 plan dies?

When the account owner dies, the terms of the 529 plan will control who becomes the new account owner. Alternatively, the account may be considered part of the account owner’s probate estate and may pass according to a will (or through the state’s intestacy laws if there is no will).

What happens if the owner of a 529 dies?

What if the owner of a 529 account dies? If the owner of a 529 account dies, the value of the 529 account will not usually be included in his or her estate. Instead, the value of the account will be included in the estate of the designated beneficiary of the 529 account.

Can a 529 account owner also be the beneficiary?

Generally, anyone can be named the beneficiary of a 529 account regardless of their relationship to the person who establishes the account. You can even establish an account with yourself as the named beneficiary.

Should 529 plans be in grandparents names?

A: 529 accounts owned by grandparents (or other non-parent) are not reportable as an asset on the FAFSA financial aid application. Grandparent owned 529 accounts are not counted in determining financial aid eligibility; all the more reasons for grandparents to make gifts to their grandchild’s 529 plan.

What happens if the owner of a 529 plan dies?

If the owner of a 529 account dies, the value of the 529 account will not usually be included in his or her estate. Instead, the value of the account will be included in the estate of the designated beneficiary of the 529 account.

Can I roll a 529 plan into an IRA?

You can’t, however, roll a 529 plan account into an IRA or any other retirement plan. If you have extra funds in a 529 plan account that you don’t want to transfer to another beneficiary, you might name yourself as the beneficiary and use the funds for your own future education.

How do I transfer a 529 plan to another person?

This type of transfer is called a rollover. Under federal tax laws you are allowed to roll over a 529 plan account for each beneficiary once during any 12-month period. To roll over an account, download the form: Rollover request—529 college savings plan (PDF). Or call us at 800-544-1914.

What should I do with my 529 plan money?

If your 529 plan is not used for college and you’d rather put that cash somewhere else—maybe in a money market account earning interest—just pay the 10% penalty fee and back income taxes. Then do what you want with the money you’ve saved up. 6 Take that dream vacation, maybe remodel the kitchen or put it toward your retirement savings.

How do I find an investment adviser for a 529 plan?

You can search for an investment adviser and view its Form ADV on Investor.gov. You can also search for any disciplinary sanctions against a broker who may sell a 529 savings plan product, as well as information about his or her professional background and registration and licensing status, on Investor.gov. Financial Aid.

Can a 529 plan account owner change the beneficiary?

A 529 plan account owner, not the beneficiary, controls the assets in the 529 plan account and may decide to use the funds for something other than their intended purpose. Nothing stops a parent from changing the beneficiary of a 529 plan they own or taking a non-qualified withdrawal.