The Future Scholar 529 Plan

With a 529 plan, parents, relatives and friends can help fund a significant portion of a loved one's future college expenses and at the same time enjoy many added benefits as a 529 plan account owner. A knowledgeable advisor who understands how these benefits work can help maximize the power of a 529 plan.

The Future Scholar 529 Plan can provide you with the knowledge and resources you need to tailor an education funding plan to each family’s needs and develop rewarding and lasting, multi-generational relationships.

Advantages for account owners

  • Ability to remove assets from a taxable estate. Annual gift tax exclusion limits per beneficiary for 2021: $15,000*/individual and $30,000/married couples.

  • Five-year accelerated gifting option allows up to five times the annual limit to be gifted in a single year. Five-year forward gifting limits: $75,000/individual and $150,000/married couples.

  • Maintain complete control of the account (including ability to revoke gifts), even though contributions are considered completed gifts and are excluded from the account owner’s taxable estate.

  • Grow account free of federal taxes (and in many states, also state income tax free).

  • "Max fund" a 529 plan. With many 529 plans allowing balances over $300,000, account owners may consider giving above their annual gifting limit to "max fund" a plan up to the maximum account balance and remove more assets from their taxable estate. This involves using some of your Unified Credit (your lifetime gift/estimate tax exclusion), currently $11.7 million for 2021.

  • Possibly avoid new taxes

    • Beginning in 2013, the Health Care and Education Reconciliation Act of 2010 imposed a new 3.8% net investment income tax on certain unearned income of high-income individuals, estates and certain trusts

    • Contributing to a 529 plan could help high-net-worth investors mitigate or avoid this tax

    • Growth in a 529, as well as distributions, are not subject to the 3.8% tax

Prepare your clients for future college costs

Saving for college may seem overwhelming, but the sooner your clients start planning the better off they will be. Columbia Threadneedle Investments offers a variety of tools you can use with clients to help estimate their personal circumstances.

  • Our College Savings Projector calculator can provide a personalized, realistic estimate of what college will cost and what it will take to save for it.
  • The Expected Family Contribution (EFC) calculator can provide an estimate of how much a family may be expected to contribute out-of-pocket when it comes time to pay for college.

Call your Columbia Threadneedle Investments representative to take advantage of our education funding resources.
 

Offering all of the benefits provided by the Internal Revenue Code Section 529, plus:

  • A multi-managed investment lineup with leading money managers View options

  • 25 single fund options and seven asset allocation portfolios.

  • Strategic and tactical management of asset allocation portfolios

  • Age-based risk tracks, which take into consideration a family's risk tolerance in addition to their child's age

Advisor resources