Owner vs. Beneficiary
Chapters in this video
- 0:00 Meet Ivy the investor and Sam the student: the power dynamic
- 0:55 Can Ivy reclaim 529 funds for a speedboat
- 1:56 Changing the beneficiary to a non-family member trap
- 3:01 UGMA and UTMA: the opposite world of irrevocable gifts
- 4:27 Age of majority and the neon green sports car scenario
- 4:57 Rapid-fire exam recap
What this video covers
- Whether a 529 owner can reclaim funds for personal use, and the exact tax plus 10% penalty consequences on earnings
- Who qualifies as a family member for a tax-free 529 beneficiary change, and why a non-family member triggers non-qualified withdrawal treatment
- Why the beneficiary has zero ownership or control in a 529 plan, even after reaching the age of majority
- How UGMA and UTMA gifts are irrevocable, with the minor owning the assets outright from day one
- What happens to custodial account control when the minor reaches the age of majority (typically 18 or 21)
- How to spot exam traps that flip 529 ownership versus UGMA/UTMA ownership in scenario-based questions
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete SIE course in the app is free too, including adaptive practice questions and spaced-repetition flashcards.