Investment News

529 savings plans are not just for college anymore

Thanks to changes in the tax law, 529 plans are being used as estate planning tools and to pay for more education-related expenses than ever before

By Mark Schoeff Jr. | Sep 7, 2019
The nation’s most widely used investment vehicle for paying for college is also becoming popular as an estate planning tool and for financing other non-college-related costs thanks to recent tax changes and some creative financial thinking.

As a result of the 2017 tax reform law, an individual contributing to a 529 college savings plan can frontload five years’ worth of contributions — or $75,000 total — into one year without incurring federal gift taxes.

It’s the most unique aspect of using 529s for estate planning, said Sam Huszczo, founder of SGH Wealth Management.

“While the client’s living, they still own the money,” Mr. Huszczo said.