Take a Closer Look at the Estate Planning Benefits of 529 Plans

 

Do you have clients with estate planning needs? You may want to suggest that they consider using a 529 plan.

The Scholars Choice 529 Plan will not only offer your clients the ability to give loved ones the means to pursue their education, it also gives the investor flexibility and significant estate tax advantages. A contribution to a 529 plan is considered a completed gift, yet the account owner maintains complete control of the assets, with the ability to fully or partially liquidate the account for any reason, at any time — say, if one faces unforeseen expenses, such as medical bills or declines in retirement savings balance.1

 


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Reduce Taxable Estate, Without Giving Up Control

By choosing to place their money, up to $30,000/beneficiary each year, in a 529 plan — versus, for example, an irrevocable trust — the investor is able to make a completed gift, but still retain control of the assets. Review our Estate Planning investment idea for more detail.

 

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Accelerate Contributions, Multiply Tax Benefits

In a single year, investors are allowed to contribute 5x the annual gift tax exclusion (up to $150,0002) per beneficiary — without any federal gift tax consequences. That can significantly reduce their taxable estate, while boosting the investment earnings through tax-deferred compounding. Review our Accelerated Gifting investment idea for more details.
 
 

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Maximize Gifting Limits, Make 6 (years of gifts) in 2 (months)

Learn how investors can maximize their year-end gifting by taking advantage of six years of annual gift tax exclusions in two months. Review our “6-in-2”investment idea for more details.
 
 


Maximum Gift Tax Exclusion


This example assumes the client has made no other gifts to the Beneficiary this year (2018), and wishes to take full advantage of a) the 2018 annual gift tax exclusion ($15,000 for individuals; $30,000 for joint filers), and b) the “Accelerated Gifting” provision (up to $75,000 for individuals; $150,000 for joint filers).
 

Maximum Gift Tax Exclusion

1 The earnings portion of a non-qualified withdrawal is subject to federal income taxes, any applicable state and local income taxes, and an additional 10% federal penalty.

For a couple filing jointly; $75,000 for individual filers.

 

GET STARTED TODAY


Take three simple steps toward helping your clients to achieve their investment goals. 
Our products cover a variety of strategies for diverse investment needs.

 

STEP 1

Download our Scholars Choice New Account Application Form.

 

Please Note: A Scholars Choice New Account Application is not required to open accounts at the following firms: Ameriprise, Merrill Lynch, Morgan Stanley

STEP 2

Review the Scholars Choice investment options.

STEP 3

Send the completed forms to: 

Scholars Choice College Savings Program
P.O. Box 9680
Providence, RI 02940-9680

 

Please Note: Advisors should check with their Home Office to confirm Scholars Choice paperwork can be sent directly to us. Some Broker-Dealers require their Advisors to send the paperwork to the Home Office.

 

Be sure to check with your firm regarding internal 529 processing procedures.

All investments involve risk, including loss of principal. Past performance is no guarantee of future results.

IMPORTANT INFORMATION: An investor should consider the Program's investment objectives, risks, charges and expenses before investing. The Program Disclosure Statement, which contains more information, should be read carefully before investing. If an investor and/or an investor's beneficiary are not Colorado taxpayers, they should consider before investing whether their home states offer 529 plans that provide state tax and other benefits benefits such as financial aid, scholarship funds, and protection from creditors that are only available to state taxpayers investing in such plans.

Investments in the Scholars Choice College Savings Program are not insured by the FDIC or any other government agency and are not deposits or other obligations of any depository institution.  Investments are not guaranteed by the State of Colorado, CollegeInvest, QS Investors, LLC, Legg Mason Investor Services, LLC, or Legg Mason, Inc., or its affiliates and are subject to risks, including loss of principal amount invested.

Legg Mason, Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the “promotion or marketing” of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

Scholars Choice® is a registered service mark of CollegeInvest. CollegeInvest and the CollegeInvest logo are registered trademarks.  Administered and issued by CollegeInvest, State of Colorado. QS Investors, LLC is the Investment Manager and Legg Mason Investor Services, LLC is the primary distributor of interests in the Program; together they serve as Manager of the Program.  QS Investors, LLC, ClearBridge Investments, LLC, Brandywine Global Investment Management, LLC, Western Asset Management Company, and Legg Mason Investor Services, LLC are Legg Mason, Inc. affiliates. Thornburg Investment Management, Inc. and Templeton Global Advisors Limited are not affiliated with Legg Mason, Inc.

Audited financial statements for the Scholars Choice® College Savings Program, including balance sheets, income statements, cash flow statements, and the Management's Discussion and Analysis (MDA), may be viewed at https://www.collegeinvest.org/about-us/financial-statements or a hard copy may be obtained by calling Scholars Choice at 1-888-572-4652.