Can a 529 plan be used as an estate-planning tool?
Yes – a 529 college savings plan is one of the few ways to move money out of your estate while keeping a degree of control over it. Contributions count as completed gifts, so they reduce your taxable estate, yet you remain the account owner and can change the beneficiary or even reclaim the funds (with tax and penalty on earnings) if needed. A special rule lets you "superfund" a 529 by front-loading up to five years of annual exclusion gifts at once – up to $95,000 per beneficiary in 2025, or $190,000 from a couple – treated as if spread over five years for gift tax purposes. That can quickly shift a large sum out of your estate while growing tax-free for education. Grandparents often use this to fund grandchildren's education and trim their estate at the same time. See wealthserene.com/tools/college-planner.
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