Coverdale Esa

My niece is a restructuring soon and I thought to create an account for his tuition for the future.

Here are the facts:

1) I live in a different state than it
2) My sister is not the same last name as her (she has not changed, but it will eventually)
3) I have not much to ask now to open an account

Thank you for your help!

Hello, I have chosen your question and she answered www.coddleshell.com - my own personal finance blog. I'll paste the answer for you. I hope this helps:)

This may be a common issue for people wishing to save for their child's education or another child. There are many similarities between the two planes and some key differences.

529 plans and Coverdale ESA are plans to raise a tax shelter that allows you to invest money and let it grow tax free. However, you must use the funds for qualified educational expenses. An advantage of two include the fact that when the time comes to college, the money in these accounts do not affect student financial aid.

529 plans offer a wide range of opportunities to save. Any state that has them and every State is different. Certain states allow people to invest in another, others not. Some boot or minimum monthly investment and other miscellaneous expenses. 529 plans are generally not a contribution limit, while the plans do Coverdell ($ 2,000 per year per child). 529 plans allow investments in certain investment options to select, ESA you invest in stocks, bonds, etc. 529 plans only pay for college expenses, the ESA allows you to use the money for the primary and secondary.

To answer your concerns:

You do not have to be in the same state as the beneficiary. However, it is sometimes advantageous to invest in a 529 plan from your own state. Many states offer tax benefits (Ohio 529 plan can deduct up to $ 2,000 of contributions) that offer even greater savings. You can change beneficiaries at any time and you always have full control over the account as long as you are custodian.

Your sister has nothing to do with the 529 plan you have configured other than to say: "Thanks." You are the owner of the plan, his daughter is the beneficiary. It does not come into the equation everything.

You do not need much to start a plan. Ohio 529 Plan lets you contribute as little as $ 15 at the time. There is a lot of investment options to help them grow for different periods. Since she is so young, aggressive growth is good, when it approaches 18, there are options to scale growth for asset protection.

Another concern that I think must be answered is that your niece can go to college in the country and continue to receive distributions from the plan. Some plans are also FDIC insured and can offer extremely low annual fee. The best thing to do would be to contact a financial advisor or tax professional to help you better understand the benefits that come with each plan.