Educational Accounts
Chapters in this video
- 0:00 529 plans: state-sponsored heavyweight basics
- 1:25 Contributor control and the custodial account trap
- 3:07 K-12 carve out and 529 plan non-restrictions
- 4:02 Coverdell ESA: the $2,000 per beneficiary limit
- 5:35 Age 18 cutoff and age 30 deadline
- 6:49 K-12 expense definitions compared
- 7:08 Rapid-fire exam recap
What this video covers
- Why the contributor maintains control of a 529 plan, and how that differs from custodial accounts under the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) where gifts are irrevocable
- The $300,000 plus contribution ceiling for 529 plans versus the $2,000 annual limit for Coverdell ESAs, and why the Coverdell limit is per beneficiary, not per contributor
- How Coverdell contributions must stop at age 18 and funds must be used by age 30, while 529 plans have no age restrictions
- Why high-income contributors face phased-out eligibility for Coverdell ESAs while 529 plans impose no income limits
- The $20,000 annual K-12 cap on 529 withdrawals and why Coverdell ESAs have no separate K-12 sub-limit despite their much lower overall funding capacity
- How beneficiary changes work in 529 plans and why the state-sponsored versus self-directed distinction matters on test day
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.