LoneStar 529 as a Gift
Anyone in your child’s life can open or contribute to a LoneStar 529. It’s a great way to celebrate a birth, or any other special occasion throughout a child’s life. Grandparents, aunts and uncles, as well as friends, will know they are giving a gift that will be appreciated for years to come.
Opening a Plan as a Gift
Any U.S. citizen or resident alien 18 years of age or older can open a LoneStar 529 Account: A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. with as little as $25, and benefit immediately from potential estate tax and gift tax advantages.
Making a Contribution as a Gift
Contributing to a child’s 529 Plan: A state-sponsored, tax-advantaged college savings program established under and operated in accordance with IRC §529 to help save for qualified education expenses. creates opportunities that could pay off long after you make the gift.
Contributions to the Plan: The LoneStar 529 Plan, which is a 529 Plan. are generally considered a “gift” from the Account Owner: The individual or entity signing the Application and establishing an Account or any successor to such individual or entity. References in this Glossary to “you” or “your” mean the Account Owner in such capacity. or another contributor to the Beneficiary: The individual identified by the Account Owner whose qualified education expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose qualified education expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. under federal gift tax provisions. Individuals are currently permitted to exclude $18,000 per year per beneficiary (or $36,000 for a married couple) from the federal gift tax1. Alternatively, individuals can make a one-time contribution of $90,000 ($180,000 for married couples) using a special five-year election. These limits assume the contributor makes no other gifts to the beneficiary during the period.
You can contribute up to $18,000 ($36,000 for married couples) annually per Beneficiary: The individual identified by the Account Owner whose qualified education expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose qualified education expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. or up to $90,000 ($180,000 for married couples) over a five-year period without triggering the Federal gift tax. Completed gifts are excluded from the participant’s estate, reducing potential estate tax obligations.
An Easy Way to Give
To make a gift so a Beneficiary: The individual identified by the Account Owner whose qualified education expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose qualified education expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. Account: A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. , follow the instructions on the gift coupon. After the contribution is credited, the Account Owner: The individual or entity signing the Application and establishing an Account or any successor to such individual or entity. References in this Glossary to “you” or “your” mean the Account Owner in such capacity. 2 receives a confirmation of your generosity.
1. If the Account Owner: The individual or entity signing the Application and establishing an Account or any successor to such individual or entity. References in this Glossary to “you” or “your” mean the Account Owner in such capacity. utilizes the special five-year lump sum exclusion and dies within five years of the funding date, the portion of the contribution allocable to the years remaining in the five-year period (beginning with the year after the Account Owner’s death) would be included in the Account Owner’s estate for Federal estate tax purposes. Clients should consult their tax advisor.
2. Non-Account Owners have no control over contributions. Only Account Owners may direct transfers, Rollover: A transfer of funds from one qualified 529 Plan account to another qualified 529 Plan account. If the transfer is completed within 60 days and is made to an account for the same Beneficiary or a Member of the Family, the rollover may be considered a tax-free transaction. Please see the Plan Description for specific situations. Funds in a qualified 529 plan account may also be rolled over to a qualified ABLE program account tax free before January 1, 2026, provided certain conditions are met. withdrawals, investment changes, and changes to the Designated Beneficiary: The individual identified by the Account Owner whose qualified education expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose qualified education expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established.