16 Jan Who should own this 529 plan? Grandma or her living trust?
Q. My child’s grandmother is opening a 529 plan. Should she own it outright or should her living trust?
A. A 529 plan is a great way to save for college expenses.
As you are noting, ownership of the plan is important.
Let’s go over some basics.
The person who opens the account is the owner. The person who the money is being saved for is the beneficiary which can be a child or grandchild.
Additionally, a 529 plan has a successor owner. The successor takes over if something happens to the original owner, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown. The owner controls how the account is managed and can change the beneficiary, he said.
In your case, it seems Grandma is the owner and one of her grandchildren is the beneficiary. If Grandma wants to, she can make her child — the parent of the beneficiary — a successor owner, Kiely said.
You mentioned Grandma’s living trust.
A living trust is used when a senior citizen has substantial assets, Kiely said.
“Normally, the creator of the trust is the trustee or manager of the trust. Living trusts also have one or more successor trustees,” he said. “Putting a 529 plan into a Living trust is possible. I believe it is an unnecessary complication.”
Email your questions to .
This story was originally published on Jan. 16, 2023.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.