Managing Your Money

529 account beneficiaries

Can you have more than one beneficiary of a 529 plan?

A 529 Plan account can have only one beneficiary. While there are two general types of 529 plans – a college savings plan or prepaid tuition plan, both require an account owner to designate a single beneficiary. However, you can generally, change the beneficiary of an account from one family member to another.

The ability to change beneficiaries on an account can provide some flexibility with how you save for each child. For example, if you establish one account for each child, you can fund and manage each account independently based on the needs of each child. You can choose to be more aggressive in funding one account over the other based on when each child is expected to attend college.

On the other hand, if you establish a single account for multiple children, you can avoid having to decide how much to fund for each child but you may lose some flexibility on matching the investment portfolio to when your child is going to attend school. Typically, you want to match the investment portfolio in the 529 account to when your child is expected to start college. The goal is to reduce the investment risk in the portfolio as your child gets closer to withdrawing funds from the account. If you have one account with intentions of serving multiple children you may not have the option to choose multiple investment portfolios for each child.

Keep in mind that 529 plans are investments vehicles and, as with any investment, you need to consider the investment’s objectives, risks, costs, and tax consequences before investing or implementing a specific investment strategy.

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