A:

Yes, the 529 plan (also known as a "qualified tuition program") allows you to distribute and roll over funds from one 529 plan to another 529 plan for the benefit of a member of the original beneficiary's family. The rollover must be done within 60 days after the date of the distribution.

For example, consider a situation where you have set aside savings for your children's education in separate 529 plan accounts and they do not use all of the money. You can keep your children as beneficiaries until they have their own children, and then make their children the beneficiaries. Your grandchildren would be among the beneficiary's family members who are eligible for this rollover. Furthermore, this rollover will be a nontaxable transaction.

(For further reading on this topic, see Choosing The Right Type Of 529 Plan, Investing In Your Child's Education and Don't Forget The Kids: Save For Their Education And Retirement.)

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. In what manner will a recession likely affect the marginal-propensity-to-save rate ...

    Learn why recessions are often accompanied by an increase in the marginal propensity to save and whether this is a concerning ...
  2. What is a family Limited Liability Company (LLC)?

    Learn about family limited liability (LLC) companies and why they are useful tools in the United States to protect family ...
  3. How is maintenance of standard of living for survivors accomplished in estate planning?

    Understand what elements of an estate plan can assist in creating certainty for survivors that allows them to maintain their ...
  4. What is the difference between an intervivos trust and a testamentary trust?

    Understand the differences between a testamentary trust and an inter-vivos (living) trust, and learn why each is important ...
RELATED TERMS
  1. See-Through Trust

    A trust that is treated as the beneficiary of an individual retirement ...
  2. Settlor

    The entity that establishes a trust. The settlor also goes by ...
  3. Personal Representative

    The executor or administrator for the estate of a deceased person. ...
  4. Equitable Division

    A legal theory that guides how property acquired during the course ...
  5. Contingent Beneficiary

    1. A beneficiary specified by an insurance contract holder who ...
  6. Student Loan Forgiveness

    Under certain circumstances, federally backed student loans – ...

You May Also Like

Related Articles
  1. Entrepreneurship

    MLPs: How They Are Taxed

  2. Stock Analysis

    When Will Google Get Its Mojo Back?

  3. Brokers

    Can Tradier's Brokerage API Replace ...

  4. Mutual Funds & ETFs

    Should GE Be Part of Your Portfolio?

  5. Savings

    How Hidden City Tickets Affect Airlines

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!