Any parent or family member of a child probably knows that 529 plans can be powerful tax-advantaged tools for saving for educational expenses, especially those incurred in college. However, they can achieve some potentially helpful estate planning goals as well.

1. Special rules allow for gifting into 529s up to five times the annual gift exclusion amount (this year, the yearly maximum is $17,000/person), so they can be particularly useful for people wanting to make larger gifts to loved ones who may have current or future educational expenses.
2. Since owners of accounts can change beneficiaries among certain extended family members, they can develop pools of funds available for future generations of college students as well.
3. Finally, as of 2024, new rules allow for up to $30,000 per beneficiary to be rolled over into Roth IRA for accounts that have been open for more than 15 years. Though we’re all waiting to see exactly how the new laws are applied, this adds flexibility for beneficiaries down the road.

Questions about how these accounts can help you achieve multiple goals for your family at once? Reach out to Compass Law and we’ll be happy to help.

https://mailchi.mp/compassadvocacy/compass-law-navigator-july-2023-9086552