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McCurrie McCurrie
& McCurrie, L.L.C.

680 Kearny Avenue
Kearny, NJ 07032-3010
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Wills should include college plans for families

College savings is an important topic for New Jersey families. The popularity of the 529 plans has made saving for college a valued tax advantage as well as a convenient way to provide higher education opportunities. Parents and grandparents alike choose these plans for their simplicity and benefits but may forget to incorporate this planning into their overall estate planning.

College 529 plans offer many benefits to family members but can also come with unexpected costs in the event that successors are not properly identified. By not naming both primary and secondary plan successors, the tuition funds may be inaccessible while an estate is in probate. In addition to delaying or preventing the availability of funds, the probate costs can be high. Some states may even assess taxes for ownership transfer on plans without proper successors if a valid will is not in place when the plan owner dies.

Plan beneficiaries, even minors, become plan owners if the original owner dies without a named successor. Some states identify another adult as the responsible party until the beneficiary reaches the age of 18. Successors can be anyone that the plan owner designates as a responsible party likely to carry out the distribution of assets according to the original will. It shoud be remembered, however, that if a successor eventually takes over a 529 account, he or she will have all rights as per the original owner. That means a successor can alter any part of the plan, even the beneficiary.

To prevent the loss or inavailability of college funds when needed, working with a professional for wealth protection, estate planning and college savings together can be a wise approach. The right advice can go a long way toward ensuring a college saving plan is ultimate available and used for college costs.

Source: Source: New York Post, “Make college savings accounts part of estate planning,” Julia Marsh and Selim Algar, May 29, 2013

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