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What happens to 529 if daughter gets married?

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  • What happens to 529 if daughter gets married?

    My daughter has left over 529 funds that are designated for her grad school However, there may be a marriage forthcoming before or during grad school. Would her newly married status pose any limitations on the use of her 529 funds? Do they get transferred to her?

     

  • #2
    I don't see a reason why ownership (by you) and beneficiary (her) would change if married. Might be harder to get financial aid since both incomes would be considered, but the 529 should stay with her.

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    • #3
      I agree, marital status shouldn't impact your daughter's eligibility to use the 529.  But, here's a thought: If your daughter and/or her new spouse have sufficient income to pay the remaining tuition, then I'd recommend that they use that income to pay the tuition bill.  That's because they'll have to pay tax on that income anyway, so they might as well use it to pay the school bill.  That will allow them to hold onto those remaining 529 funds for their own future children down the road.  If they do that, they'll enjoy a lot of years of tax-free compounding.

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      • #4
        Thank you both. They won't have sufficient income for school, but it's good to know she can use the 529.

        This was one of those family Thanksgiving Day discussions that caught me by surprise...

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        • #5
          Interesting Thanksgiving Day topic - better than politics, for sure   . No change to 529 fund status. Any $$ not used can go to your other children, if applicable. They can also go to her children but the transfer to a stepped-down generation will be treated as a gift. Doubtful there would ever be any tax implications but, as usual, depends upon facts and circumstances.
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #6




            Interesting Thanksgiving Day topic – better than politics, for sure  ???? . No change to 529 fund status. Any $$ not used can go to your other children, if applicable. They can also go to her children but the transfer to a stepped-down generation will be treated as a gift. Doubtful there would ever be any tax implications but, as usual, depends upon facts and circumstances.
            Click to expand...


            Can the money be used for new son in law?

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            • #7


              Can the money be used for new son in law?
              Click to expand...


              Yep, the spouse of a "qualifying family member" is also a qualified family member.
              Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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              • #8




                My daughter has left over 529 funds that are designated for her grad school However, there may be a marriage forthcoming before or during grad school. Would her newly married status pose any limitations on the use of her 529 funds? Do they get transferred to her?

                 
                Click to expand...


                If your daughter just told you she got engaged, congratulations!

                Remember that the 529 money is your money, not her money. You can change the beneficiary to anyone you want at any time. New additions to the family means new possible beneficiaries (e.g. son-in-law, grandchildren), but the actual beneficiary is up to you.

                -WSP

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