While no parent ever wants to consider the fact that they may pass away and leave their children behind, considering what might happen to college savings funds upon the death of a parent may be imperative. Those who are dealing with estate planning issues may want to consider what would happen to their child’s college savings if they passed away.
New Jersey residents may be interested to hear that the executive director of the Utah Educational Savings Plan says that parents who set up 529 savings plans or tax advantaged education savings plans without setting up a successor may risk their child losing control over the plans if they were to pass away. Although it may be unlikely, parents may want to consider setting up a successor to control the funds in the event of their death.
Parents who are looking to set up a successor first must understand how the process works. In order to set up a successor, individuals will need to request forms in association with their savings plans to name both a primary and secondary successor. By doing so, parents can help ensure that someone responsible is able to control the account in the event of a death. While it may not be the most pleasant part of estate planning, it could very well be a necessary one.
Although estate planning may seem simple, it can often be complex, and without the help of an estate planning attorney, individuals may find themselves waist deep in complex estate planning issues. Those setting up an estate plan may want to get assistance from an estate planning attorney to ensure that all of their bases are covered.
Source: US News, “Make college savings accounts part of estate planning”, Reyna Gobel, May 31, 2013