The best estate plans will make the most of your assets while confirming the values most important to you. A proven method of encouraging higher education – while maintaining asset control and reducing tax liability -is to open 529 college savings plans for your children or grandchildren. Washington’s 529 plan, the Guaranteed Education Tuition (GET) Program, offers a great way to help your family afford college in the future.
Why a 529 Plan?
529 plans have significant advantages over other savings vehicles such as mutual funds, bonds or savings accounts. They allow you to maintain control over your asset and protect it from estate taxes. Plus, growth and withdrawals from a 529 plan are tax free when used for qualified higher education expenses.
How do I ensure the money will be used for college expenses?
When you open a GET account, you maintain full control. You can designate an account owner survivor to take over the account at the appropriate time. Choose
someone who will honor your intentions and further protect the use of the account by outlining specifics in your will.
How much can I contribute?
You can now gift up to $14,000 per beneficiary, per year ($28,000 if gifting with a spouse) without incurring the federal gift tax. One-time contributions to a GET account can be as much as $70,000 ($140,000 if gifting with a spouse) if amortized over five years.
What if my kids or grandkids don’t go to college?
Each beneficiary has ten years after reaching college age to allow for a change in plans. Beyond that, GET accounts are fully transferrable to other family members, or are refundable at the increased value (taxes and penalties may apply).
Remember that this advice is general in nature. You always want to consult a financial advisor when planning your estate.
About GET
GET is in its 15th year of helping Washington families save for college tuition. GET is Washington’s 529 prepaid tuition plan that allows you to pay a set price today with the guarantee that your account will increase to match rising tuition in the future. All earnings and withdrawals from a GET account are tax-exempt when used for qualified higher education expenses. Best of all, GET can be used to attend colleges, universities and technical schools anywhere in the country.
Resources
• Learn more about GET and Enroll by May 31st: http://www.get.wa.gov
• About 529 Plans:
