Smart planning for a bright future
Comprehensive strategies for education funding
Education costs have risen dramatically—and they’re still climbing. Whether you’re saving for private school, college, or graduate education, the earlier you start planning, the more options your family will have. At MVM Advisors, we help parents and grandparents navigate the often-confusing world of education funding with tax-efficient strategies that align with your long-term goals.
What we Offer
529 College Savings Plan selection
Coverdell Education Savings Accounts (ESAs)
Tax and estate planning integration
Risk & inflation adjusted forecasting
Plan comparison & contribution optimization
Multi-child & multi-generational strategies
Additional Considerations
529 plans offer tax-deferred growth and tax-free withdrawals for qualified expenses
Some states offer additional benefits, like tax deductions or Prepaid Tuition guarantees
529 assets remain under your control and can be transferred between beneficiaries
Coverdell ESAs allow for broader educational use but have lower contribution limits
Prepaid plans require careful review of solvency and state guarantees, especially during economic downturns
Gift tax exclusions and estate planning strategies can be built into college savings contributions
WHY IT MATTERS?
college planning demands strategy
College tuition, room and board, and related expenses can exceed six figures per student. And while student loans remain an option, families who plan ahead can benefit from significant tax advantages and financial flexibility. Without a strategy, your child’s education could come at the expense of your retirement or financial security.
We help you explore the right combination of savings tools—tailored to your income, goals, and timeline—so you can prepare for education costs without sacrificing other priorities.
529 College Saving Plans
Who can contribute to a 529?
Once an account has been established, anyone can contribute to it. Any investor can participate, regardless of their income or net worth. Furthermore, there are no age or time limit restrictions for the contributor or the beneficiary.
What is the difference between “Account Owner” and “Beneficiary”?
Once an account has been established, anyone can contribute to it. Any investor can participate, regardless of their income or net worth. Furthermore, there are no age or time limit restrictions for the contributor or the beneficiary.
How will a 529 plan affect my child’s chances to qualify for financial aid?
Guidance for the U.S. Department of Education states that your 529 savings account is treated as an asset of the parent or other account owner in determining eligibility for federal financial aid. However, the rules in this area remain somewhat uncertain. In short, saving for college with a 529 plan will impact a student’s financial aide eligibility, although the precise effect will depend on the type of 529 plan and the policies of the institution. Of course, saving for college through other means can have a substantial impact as well, in many cases more substantial than a 529 plan.
What if the beneficiary decides not to go to college?
The account owner has a few choices if the beneficiary decides not to go to college. First, he or she can leave the funds in the account in the event that the beneficiary eventually decides to go to school. Another alternative is to change the beneficiary to another qualified family member of the original beneficiary. Lastly, the account owner can take a non-qualified withdrawal from the account subject to state and federal income taxes, as well as a 10% penalty on earnings.
What if the beneficiary receives a scholarship?
If the beneficiary receives a scholarship, the account owner can leave the funds in the account to be used at a future date (for example, graduate school costs). Another option is to change the beneficiary to someone who is a qualified family member of the original beneficiary. The account owner may also withdraw up to the amount of the scholarship without penalty. However, the account owner will be taxed at his or her tax rate.
What if I change my mind about investing in a 529 plan?
The account owner can withdraw the funds at anytime. However, if funds are withdrawn and not used for qualified higher education expenses, earnings will be subject to state and federal income taxes at the account owner’s tax rate. In addition a 10% penalty on earnings will be assessed.
Can I transfer assets from an existing UGMA/UTMA into a 529 plan?
Generally, yes. Many 529 plans accept cash proceeds from the sale of assets held in UGMA/UTMA accounts. This may be a great option for those who have set up UGMA/UTMA accounts for the purpose of educational funding provided the account is not over funded.
The placement of UGMA/UTMA funds in a 529 account can provide all the tax and investment benefits associated with 529 plans. However, once the transfer is made, you will be unable to change the beneficiary and any withdrawals from the 529 account must be used for the benefit of that beneficiary only.
The restriction on beneficiary changes would apply to the amount transferred plus any separate contributions. Remember, however, that a 529 plan can only accept cash and so any appreciated securities in the UTMA/UGMA would first have to be sold and capital gains would be reportable on the minor’s tax return. In addition, commission or sales charges may be incurred during the liquidation process.
What happens in the event of the participant’s death or disability?
The participant may designate a successor participant of the account, effective upon the participant’s death or disability. The successor must also agree to act as the successor participant.
Can I invest for one beneficiary in more than one state’s 529 plan?
Absolutely. There are several dozen states that have 529 plans without any state residency requirements. You can open accounts in as many of these states as you want, although in most cases there is little reason to have accounts in more than two or three states.
Simple & Straightforward.
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