Adventures in Estate Planning: The Educational Trust Fund

Adventures in Estate Planning: The Educational Trust Fund

Helping loved ones finance the cost of education is a wonderful & long lasting gift.  But when you build this type of gift into your estate planning aspirations, the more traditional vehicles can be limiting in many ways.

529 plans and Coverdell ESAs are two of the most popular options, but the accounts can be rigid and limiting.  If your objectives are more unique, say you want to help multiple beneficiaries or include other requirements for access, you’ll need a more customized solution.

Enter the educational trust fund.  Educational trust funds give you complete control over how your gift is to be managed and distributed.  If your gifting strategy is even marginally complex, an educational trust fund might be your best option.

 

How They Work

When contributing to the 529 or Coverdell account of a loved one, you’re faced with numerous and rigid restrictions.  There are contribution limits, there are limitations on what the funds can be used for, and there are restrictions on portability and who may use the funds.  They provide a great way to save for college on a tax advantaged basis, but there’s not much room to customize.

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