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 does the trust maker transfer funds into a revocable trust?

    Learn how revocable living trusts are established, how the trust maker transfers funds into the trust, and the advantages ...
  2. What is the difference between a revocable trust and a living trust?

    Learn how a revocable trust and living trust are two terms used to describe the same thing and what the key provisions are ...
  3. Why do economists think it is important to track discretionary income?

    Learn about the importance of discretionary income to economists, particularly for economists who emphasize consumer spending ...
  4. What is the difference between disposable and discretionary income?

    See how disposable income and discretionary income are different, with an example to demonstrate why discretionary income ...
RELATED TERMS
  1. Wealth Management

    A high-level professional service that combines financial/investment ...
  2. See-Through Trust

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

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

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

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

    1. A beneficiary specified by an insurance contract holder who ...

You May Also Like

Related Articles
  1. Professionals

    Is a Google Robo-Advisor on the Horizon?

  2. Stock Analysis

    General Electric Returns Vs The Dow ...

  3. Savings

    College Tuition vs. Investing: Is It ...

  4. Entrepreneurship

    MLPs: How They Are Taxed

  5. Stock Analysis

    When Will Google Get Its Mojo Back?

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!