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. Can an IRA beneficiary roll the IRA over into another account and designate another ...

    It depends on the provision of the IRA plan document. Some (though very few) do not allow the designation of successor beneficiaries. ... Read Answer >>
Related Articles
  1. Retirement

    Wealth-Building IRA Rollovers

    Rollovers allow your tax-deferred retirement assets to grow, even when the world around you is changing.
  2. Retirement

    3 Deadlines For Retirement Plan Beneficiaries

    To take full advantage of new RMD regulations, beneficiaries need to take action before important deadlines.
  3. Financial Advisor

    How to Handle Client Beneficiary Designations

    Beneficiary designations are a critical financial planning step that can be easily overlooked. Here's how to ensure they are properly done.
  4. Retirement

    Why You Need to Update Retirement Account Beneficiaries

    The designation of beneficiaries in retirement accounts takes precedence over a will. Don't forget to keep them updated.
  5. Retirement

    Mistakes in Designating a Retirement Beneficiary

    Make sure your beneficiary designations not only reflect your intentions but also meet the requirements to be effective.
  6. Retirement

    What You Should Know About IRA Beneficiaries: Part 2

    Here's how IRAs, and the beneficiaries you name, work with wills and trusts.
  7. Personal Finance

    Saving for College Begins With a 529 Plan

    Discover the many benefits of saving for college with a 529 plan.
RELATED TERMS
  1. 529 Plan

    A 529 plan provides tax advantages when saving and paying for ...
  2. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  3. Named Beneficiary

    This term refers to any beneficiary named in a will, a trust, ...
  4. Rollover

    A rollover is when you do the following: 1. Reinvest funds from ...
  5. Alternate Beneficiary

    In a will, an alternate beneficiary is usually named in case ...
  6. Coverdell Education Savings Account - ESA

    A tax-deferred trust account created by the U.S. government to ...
Trading Center