Taxable estate

529s Can Be Estate Planning Vehicle

Retrieved on: 
Thursday, August 20, 2020

Another important benefit is the potential use of 529 accounts for gifting and estate planning.

Key Points: 
  • Another important benefit is the potential use of 529 accounts for gifting and estate planning.
  • A donor can gift up to $15,000 annually per 529 beneficiary free of federal estate and gift tax impact if no other gifts to the recipient are given that year.
  • If the donor dies before the five years are up, a prorated portion of the contribution will be considered part of the donors taxable estate.
  • Its a great vehicle for lightening the estate tax load on your loved ones, while supporting future generations by providing funding for their college education.