Legacy & Estate Planning

When you make a gift contribution to the Edvest College Savings Plan, the student isn’t the only one who benefits.

When you make a gift to a loved one’s 529 account, you do it because you want to give the gift of education. At the same time, you should enjoy the tax advantages offered by the Edvest College Savings Plan. Learn why there’s more than one reason to make a gift contribution to a 529 plan. Consult your tax advisor.

How the Edvest College Savings Plan helps with Your Estate Planning

  • There’s no federal gift tax on contributions you make up to $16,000 per year if you’re a single filer, or $32,000 if you’re a married couple.
  • You can also accelerate your gifting with a lump sum gift of $80,000 if you’re a single filer or $160,000 if you’re married and pro-rate the gift over 5 years per the federal gift tax exclusion.
  • Edvest College Savings Plan accounts are not subject to the ‘Kiddie Tax’.
  • You can gift this amount to as many individuals or beneficiaries as you like, free from income tax.
  • Effective in 2023, the amount of the federal annual gift tax exclusion is increasing to $17,000 per year ($34,000 for married contributors). You may gift amounts up to $85,000 for single filers and up to $170,000 for married filers if pro-rated over 5 years.

What Federal Gift and Estate Tax Planning Means to You

If your estate exceeds the exempt amount, estate taxes can be quite high — in some cases more than 40%. Since contributions to the Edvest College Savings Plan are considered a completed gift for federal gift and estate tax purposes, it’s removed from your estate, and can help reduce your future estate tax exposure. Plus, you can do this without incurring the federal gift tax as long as your contribution is within the current exclusion limits. This holds true whether you’re the account owner or simply a contributor.

Federal tax law is complex and there are state and local taxes to consider, as well as, your personal situation and other circumstances. While the many tax advantages associated with the Edvest College Savings Plan can be an important part of your financial planning process, you may want to consult with a tax advisor to get a full understanding of how these benefits affect your estate.