For many parents, witnessing their child go through college is truly an accomplishment. That is why many parents start saving early on with a college savings plan. Still, what happens when neither parent is able to see their child attend college due to an untimely death? Even thought the average life expectancy is now past the age of 75, many Kent parents wish to ensure their heirs are taken care of in the unlikely event of their death.
A 529 plan, or college saving plan, is a great way for parents to start saving money for college. A 529 plan is a tax-advantage educational savings plan that allows parents to put money away into an account and secure it until it is time for their child to use it towards college. If a parent is to die unexpectedly, however, without leaving the account to a successor, they risk having someone random control their child's education fund.
That is why many parents have set up some form a basic estate plan to ensure their heirs will be taken care of, especially with regards to their academic future. In the absence of an estate plan, a 529 plan may be left to the heirs through probate court, but what's stopping a child from using the money to buy a Mustang instead of going to college? By naming a successor in an estate plan, parents can ensure the successor makes sure to properly distribute the 529 plan for college savings. This successor is usually someone trusted in the family or a close friend. In some cases, an attorney is appointed as a successor.
Life is very fragile and can be taken away at any moment. Any Kent resident that wants to make sure their heirs are taken care of in the future may want to consider setting up a basic estate plan. They need not be overly stressful or expensive. A basic estate plan can be set up quickly and save a lot of stress down the road.
Source: US News, "Make college savings accounts part of estate planning," Reyna Gobel, May 31, 2013