Did you know that the beneficiary chosen when an investor sets up a 529 plan can be changed at any time, for any reason?
While there are limitations as to who may be selected as a replacement, changing beneficiaries is totally up to the account owner—and there's no need to provide a reason for doing so.
Why Change Beneficiaries?
Beneficiary changes often come into play as children near high school graduation. Perhaps a child decided not to go to college, despite the urging of his or her parents. Or there may be excess money remaining in the 529 account after all the beneficiary's college bills have been paid.
Who Can Be the Plan's New Beneficiary?
No matter what the reason for the beneficiary change, account owners are faced with a decision. One idea is to name a second child in the family. But switching to another child isn't the only possible route. For example, a spouse or even the account owner may be planning to go back to school, and either may be named the new beneficiary.
The only stipulation is that the replacement beneficiary must be a member of the same family as the original beneficiary.1
Please contact us if you have questions or would like more information about changing beneficiaries.
1 Please see the Offering Statement or Disclosure Booklet for the rules and restrictions regarding choosing replacement beneficiaries. The following family members of the existing Designated Beneficiary are considered "Eligible Family Members" and can be named as the replacement Designated Beneficiary: son, daughter, or descendant of either; stepson or stepdaughter; brother, sister, stepbrother or stepsister; stepfather or stepmother; father, mother or ancestor of either; son or daughter of a brother or sister; brother or sister of father or mother; son-in-law, daughter-in-law, father-in-law, mother-in-law, sister-in-law or brother-in-law; spouse or spouse of any family member listed above; or first cousin.
