Many parents and grandparents want to include a college savings plan for the children they care about in their estate planning. College savings plans have tax advantages, as well as provide education security and freedom of student loan debt for their loved ones. When planning their estate administration, it’s important for Florida residents to consider the successor of a college savings plan, in the event the account owner should pass away.
Some people don’t realize what could happen if a successor hasn’t been named for an educational savings plan. A successor is someone who will control the account if the original owner has died or has become incapacitated. It’s always safe to name primary and secondary successors for this reason; however, careful planning and consideration are crucial. You should name as the successor only someone you can trust to control your children’s educational funding if you’re no longer around to ensure your wishes are being followed.
A successor can also be in the form of a trust to carry out your wishes. If there is no successor to the savings account and you die while the beneficiary is under 18, the account could go into a lengthy probate period. Or a beneficiary over the age of 18 may be named as the account owner--and this is also a reason to be sure you’ve named a successor you can trust to keep the children’s educational needs in mind. Young adults can be very responsible, but some can make impulsive decisions when there’s a sudden windfall.
Because you care about educational opportunities for your children or grandchildren, be sure you haven’t neglected the important job of naming a responsible and trustworthy successor for your college savings plan.
Source: Source: U.S. News, “Make College Savings Accounts Part of Estate Planning,” Reyna Gobel, May 31, 2013