Will the value of my 529 account be included in my estate or my beneficiary's estate?
Answer
All contributions to 529 plans are considered present interest gifts. So, in general, the value of a 529 plan is included in the estate of the designated beneficiary.
There is an exception if you contribute more than $12,000 to the 529 account of a particular beneficiary in a given year and you make the election to treat your contribution (up to $60,000) as if made evenly over a five-year period. If you make this election and then die before the five-year period is up, the portion of the contribution allocated to the years after your death will be included in your gross estate.
For example, you make a $35,000 contribution to a state savings plan in Year 1 and elect to treat the gift as if made over five years. You die in Year 2. Result? Your Year 1 and Year 2 contributions – $7,000 each year ($35,000 divided by 5 years) – are completed gifts to the beneficiary. The remaining $21,000 ($35,000 minus $14,000) is included in your gross estate.
GE 37320 (03/07)
If you are investing in a 529 plan outside of your state of residence, you may lose available state tax benefits. Make sure you understand your state tax laws to get the most from your plan.
529 plans are subject to enrollment, maintenance, administration/management fees and expenses. 529 plans are subject to fluctuation in value and market rise, including loss of principal.
Investors should consider the investment objectives, risks, charges, and expenses of 529 plans carefully before purchasing. More information about 529 plans can be found in the issuer's official statement. Please read the official statement carefully before investing.
AXA Equitable does not provide legal or tax advice.
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