Getting a head start on saving for college is critical to achieving your college savings goals. Our Financial Advisors can help you determine what investment vehicle is most appropriate and how much you should be saving.

529 College Savings Plan

These plans were first established under the IRS code Section 529 and are tax-advantaged savings plans designed to help individuals save for future costs of college education. These plans can offer tax free growth of assets when used for qualified college expenses and depending on the state you live in, can also offer potential tax deduction on all or part of annual contributions. These benefits have made these plans a popular vehicle for clients looking to save for their children’s education.

529 College Savings Plans are administered by each state and have different rules, funds available within the plan and the deductibility of contributions depend on your resident state and the state plan you choose. We encourage you to contact your advisor to help you evaluate which plan would best suit your goals.

Educational Savings Accounts

Also known as Coverdell Education Savings Accounts permit individuals to deposit up to $2,000 per year for an eligible beneficiary (under age 18). Any dividends, appreciation, interest can be withdrawn without being taxed as long as the funds are used for qualified educational expenses and are withdrawn by age 30.

While many people may opt for a 529 College Savings Plan to save for college expenses, some individuals may decide to send their child to a private school for part or all of their primary education. Unlike 529 plans, the Coverdell Educational Savings Account distributions can be used on a tax advantaged basis for both qualified primary and secondary educational costs. There are a number of rules including income limits on the ability to contribute to a Coverdell Account as well as potential tax penalties if funds removed from the account deviate from the stated rules for the plan. Please contact your Financial Advisor to learn more about these accounts.

Custodial Accounts

A custodial account is simply a brokerage account opened in the name of the minor with an “of age” custodian to manage the investments on behalf of the minor. Contributions to these accounts are considered an irrevocable gift to the minor and are governed under wither the Uniform Gift to Minors Act or the Uniform Transfers to Minors Act. Which state you livein will determine which act will govern the rules for the account. These accounts offer flexibility in the investments available and do not have any limitations on how the assets are used, however they do not offer any tax preference. Additionally, depending on which state and which act governs the account, the assets held within the account become the assets of the minor at age 18 or 21. Our Financial Advisors can help you to determine if this account would best suit your goals, so please contact us with any questions.


Educational Trusts offer the Grantor (person donating the money to the trust) greater control over assets than by using a custodial account. The terms of how the money is used for education, which types of education the trust will support, what types of investments are permitted in the account, and how the beneficiary of the account can access to the funds in the event that the beneficiary does not attend college can all be determined and written into the rules of the trust. You will need the assistance of an attorney to draft the trust, however, if you are concerned that assets gifted to an account beneficiary could potentially be misused, an Educational Trust may help you to solve that problem.