 | Will the value of my 529 account be included in my estate or my beneficiary's estate?
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Answer:
All contributions to 529 plans are considered present interest gifts. So, in general, the value of a 529 plan is included in the estate of the designated beneficiary.
There is an exception if you contribute more than $13,000 to the 529 account of a particular beneficiary in a given year and you make the election to treat your contribution (up to $65,000) as if made evenly over a five-year period. If you make this election and then die before the five-year period is up, the portion of the contribution allocated to the years after your death will be included in your gross estate.
For example, you make a $35,000 contribution to a college savings plan in Year 1 and elect to treat the gift as if made over five years. You die in Year 2. The result is that your Year 1 and Year 2 contributions--$7,000 each year ($35,000 divided by 5 years)--are completed gifts to the beneficiary. The remaining $21,000 ($35,000 minus $14,000) is included in your gross estate.
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