529 College Savings Plans let you easily change your investment options and beneficiaries within the plan you choose, and give you and your clients a variety of funding options. Additionally, assets in a 529 College Savings Plan do not count as part of your taxable estate if you are the account holder.
You can contribute to a 529 College Savings Plan without incurring gift taxes or penalties by taking advantage of the federal gifting limits. And, you can remove significant assets from your clients’ estates by forward funding a 529 College Savings Plan. This strategy allows you to take advantage of up to five years’ worth of gift tax exclusions in a single year.*
The earlier you start saving, the less your clients are likely to pay out-of-pocket for college.
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*If an account owner utilizes the special five-year lump sum exclusion and dies within five years of the funding date, the portion of the contribution allocable to the years remaining in the five-year period (beginning with the year after the account owner’s death) would be included in the account owner’s estate for federal estate tax purposes. Clients should consult their tax advisors
This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice, or to avoid penalties that may be imposed under U.S. federal tax laws. Clients should contact their own legal or tax advisors to learn more about the rules that may affect individual situations.
Investments in 529 College Savings Plans are neither FDIC insured nor guaranteed and may lose some value. Some states offer favorable tax treatment to their residents only if they invest in the state’s own plan. Investors should consider before investing whether their or their designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program and should consult their tax advisor.
Before investing in a plan, investors should carefully consider the investment objectives, risks, charges and expenses associated with municipal fund securities. Plan disclosure documents contain this and other information about a plan, and may be obtained by asking your financial advisor or calling 1.800.CALL OPP (225.5677). Investors should read these documents carefully before investing.
529 Plans managed by OFI Private Investments Inc. are distributed by OppenheimerFunds Distributor, Inc. Member FINRA, SIPC
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