Benefit Clients, and Build Your Practice

 

Directing customers toward the Scholars Choice 529 Plan will contribute to giving kids or grandkids the means to pursue their education. It also gives the investor, your client, financial flexibility and annual tax advantages. The account owner maintains complete control of the plan, with the ability to fully or partially liquidate the account for any reason, at any time — say, if your client faces unforeseen expenses, such as medical bills or declines in retirement savings balance.1

The 529 college savings plan investment will grow tax-deferred as long as the money remains in the Scholars Choice account. Withdrawals for higher education expenses are currently free from federal income tax.2 Your client can also withdraw from their 529 plan to pay tuition at private or parochial elementary or secondary schools (up to $10,000/yr).

 

Reduce Taxable Estate Light Bulb

Gift Education, Reduce
Taxable Estate Value

Do you have clients that are interested in estate planning? You can suggest that they consider using a 529 plan. By choosing to place their money, up to $30,000/beneficiary each year, in a 529 plan versus an irrevocable trust, they retain a greater degree of control to close, withdraw or reallocate as they see fit. Review our Estate Planning investment idea for more detail.

 

Checklist for Gift Tax Exclusions

Accelerate Contributions,
Multiply Tax Benefits

In a single year, your clients are allowed to contribute five times the annual gift tax exclusion ($150,000 couple filing jointly, $75,000 individually) 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.

 

IRA Distribution Calendar

IRA Distributions,
Shield Income from Taxes

With most IRA and retirement plan accounts, an investor will have to take their required minimum distribution (RMD) at age 70 1/2 or face penalties. If they don’t need the RMD money, which would become taxable income, advise them to consider transferring all or part of the distribution into a 529 plan. It’s a smart way to keep control of assets and continue to benefit from tax deferral.

 

 

1 As a non-qualified withdrawal, the earnings portion would be subject to ordinary income tax plus an additional 10% penalty.

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

 

 

Get Started Today


Take three simple steps toward helping your clients 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.