For many families, funding a child’s education is a top priority. With tuition costs continuing to rise, 529 plans offer a tax-advantaged vehicle to grow and transfer wealth while ensuring future educational needs are met.
While many assume 529 plans are just for families needing help saving for college, they also can serve as an effective estate planning tool. Benefits can include:
- Investments grow tax-free, and withdrawals for qualified education expenses aren’t taxed.
- Contributions remove assets from your taxable estate while benefiting future generations.
- Unused funds can be transferred to other family members or even converted into a Roth IRA (up to $35,000 per beneficiary) providing multi-generational flexibility.
One of the most useful strategies can be superfunding a 529 plan by front-loading contributions. The IRS allows individuals to contribute up to five years’ worth of the annual gift tax exclusion in a single year—currently $95,000 per beneficiary ($190,000 for married couples filing jointly). Benefits of front-loading a 529 Plan:
- Maximizes tax-free compounding over a longer period.
- Removes assets from the taxable estate while maintaining control over them.
- Allows for significant growth potential compared to smaller, gradual contributions.
- Creates a legacy fund for education—leftover funds can be used for future grandchildren.
At Gryphon, we help families integrate education funding into their long-term estate and financial planning. If you would like to talk specifically, feel free to reply to this email or reach out to your Advisor Team.
Disclosure
This material is provided by Gryphon Financial Partners, LLC (“Gryphon”) for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Facts presented have been obtained from sources believed to be reliable. Gryphon, however, cannot guarantee the accuracy or completeness of such information. Gryphon does not provide tax, accounting or legal advice, and nothing contained in these materials should be taken as tax, accounting, or legal advice. Individuals should seek such advice based on their own particular circumstances from a qualified tax, accounting or legal advisor.