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. How do I file taxes for income from foreign sources?

    If you are a U.S. citizen or resident alien, your income (except for amounts exempt under federal law), including that which ... Read Full Answer >>
  2. Are estate planning fees tax deductible?

    Estate planning fees may be tax deductible, but only if certain conditions have been met. Internal Revenue Service (IRS) ... Read Full Answer >>
  3. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  4. Are UTMA accounts escheatable?

    Like most financial assets held by institutions such as banks and investment firms, UTMA accounts can be escheated by state ... Read Full Answer >>
  5. How much money does Texas make from unclaimed property each year?

    In 2014, the office of the Texas Comptroller of Public Accounts reported $234 million in unclaimed property claimant liabilities, ... Read Full Answer >>
  6. Are Cafeteria plans subject to FICA, ERISA or FUTA?

    Cafeteria plans are employer-sponsored benefit plans that provide both taxable and nontaxable, or qualified, benefit options ... Read Full Answer >>
Related Articles
  1. Estate Planning

    Estate Planning: 16 Things To Do Before You Die

    If you don’t plan your estate, your surviving family may have to deal with disputes and probate that were avoidable.
  2. Your Practice

    Advisors: $240B in Fees Up for Grabs by 2030

    Advisors have an opportunity to win generational assets over the next 15 years. Here are some tips on how to cater to different demographics.
  3. Investing

    3 Small Steps to Maximize Your Investing Goals

    Instead of starting the New Year with ambitious resolutions, why not taking smaller manageable steps that can have a real impact.
  4. Personal Finance

    Want Your Will to Prevail? Don't Die Intestate

    If you die without making a last will and testament, you are said to have died intestate. What happens to your assets in this case?
  5. Tax Strategy

    A Beginner’s Guide To Tax-Efficient Investing

    Tax-efficiency is a measure of how much of an investment’s return remains after taxes are paid.
  6. Your Clients

    When to Trust a Revocable Trust

    Unsure of how your assets will be dispersed once you're gone? Here's how setting up a revocable trust while you're here can be a big benefit.
  7. Retirement

    The High Net Worth Guide to Medicare

    In the years ahead, wealthy seniors will pick up an even bigger part of the Medicare tab. However, there are ways to minimize the bill.
  8. Philanthropy

    How Billionaires Around the Globe Give Back

    This list of foreign billionaire philanthropists is robust. Here's a list of rich entrepreneurs around the globe who have given back in really big ways.
  9. Savings

    How to Save Your First $100,000

    Saving your first $100,000 requires the discipline to put money away and control your spending. But just remember – the savings get bigger as you go.
  10. Economics

    What is the American Dream in 2016?

    The American Dream is still alive and well, but it looks very different than it used to.
RELATED TERMS
  1. Fiduciary

    A fiduciary is a person who acts on behalf of another person, ...
  2. Student Loan Forgiveness

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

    An involuntary fee levied on corporations or individuals that ...
  4. 529 Plan

    529 is a category of plans that provide tax advantages when saving ...
  5. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, ...
Trading Center