529 Plan Ownership -- CSS PROFILE

[vballmom]

<p>Interesting question. Since the parent is the successor participant, he or she essentially “owns” the 529, isn’t that right? If so, it would need to be reported on Profile as a parent asset. And presumably the parent could designate a different beneficiary to the 529, just like a normal parent-owned 529.</p>

<p>Here’s what Fidelity says:</p>

<p>

Assets Held in a 529 College Investment Plan</p>

<p>While assets held in these plans are not part of the participant’s taxable estate, the participant has rights and responsibilities to the account which continue after time of death. If the deceased was the participant of a 529 College Investment Plan with a transfer on death registration, the rights of the participant transfer to the successor participant outside the probate estate. If there’s no transfer on death registration, control of the account passes to the participant’s probate estate. A successor will be identified in the participant’s will or, if there is no will, by the participant’s state intestacy laws.

</p>

<p>Here’s from the Profile instructions:</p>

<p>Q: What are Section 529 college savings plans? Should assets from these plans be reported on the PROFILE Application?</p>

<p>A: The term “Section 529 Plan” is another phrase for Qualified Tuition Plans (QTP). These are savings plans that allow parents, other relatives, and even non-relatives to save funds each year for college expenses for a designated beneficiary (the student who will eventually attend college).</p>

<p>QTP’s fall into one of two categories: College Savings Plans or Prepaid Tuition Plans. All 50 states sponsor at least one type of QTP.</p>

<p>College Savings Plans are fairly simple, although investment options will vary from state to state. The owner of the plan deposits funds into the account and when the beneficiary enrolls in college, those accumulated funds (principal plus interest) may be withdrawn to help pay for each year of the beneficiary’s college expenses.</p>

<p>Prepaid Tuition Plans allow the family to purchase “shares” of tuition costs for a designated beneficiary. These plans allow the family to “lock in” future tuition charges at today’s rates.</p>

<p>Since these plans represent an asset - a savings account of a sort - they must be reported on the PROFILE in PA-120 if the parent is the owner of the plan established for the student or the student’s brothers or sisters.</p>

<p><a href=“https://profileonline.collegeboard.com/prf/1application_faq.jsp#Top[/url]”>https://profileonline.collegeboard.com/prf/1application_faq.jsp#Top&lt;/a&gt;&lt;/p&gt;