Latest / The College Savings Podcast with Fexingo: 529 Plans, Education Funding, and Student Costs
529 Plan Penalty-Free Withdrawals After Your Child's Death
Episode 25 of The College Savings Podcast tackles a difficult but important question: what happens to a 529 plan if the beneficiary passes away before the funds are used? Lucas and Luna walk through the IRS rules on penalty-free withdrawals following a beneficiary's death, including the 10% penalty waiver and the tax treatment of earnings. They discuss the distinction between a beneficiary death and a non-qualified withdrawal, how to document the change in circumstance, and what happens if the account owner is also the beneficiary. The hosts also cover strategies for naming successor…
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