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Education Funding

With the average cost of a four-year college degree at more than $100,000, education funding is an increasingly important consideration in a long-term investment strategy. J.P. Morgan Securities offers a variety of college savings plans that may provide tax-advantaged saving for future qualified higher-education expenses for a designated beneficiary. Your Financial Advisor can help you select an appropriate plan and investments based on your objectives and time horizon.

College Savings Options

  • 529 college savings plans
    These state-sponsored plans offer high contribution limits, flexibility and control. Investments grow tax-free when withdrawn for qualified higher education expenses at any accredited college or university.
  • Coverdell education savings accounts
    These accounts can fund any level of education, not just college. Eligible investors can contribute up to $2,000 per minor child each year. Investment growth is tax-deferred, and qualified withdrawals are free from federal taxes.
  • UGMA/UTMA account
    These accounts are opened for the benefit of minor children but managed by adult custodians. Contributions are irrevocable, meaning they can't be taken back or transferred to others. Upon reaching adulthood, beneficiaries can withdraw assets for any reason, not necessarily college.
  • Minority trust (§ 2503(c))
    A “minority trust” can be the recipient of an annual exclusion gift without the need for a withdrawal right. The minor must be given the right to withdraw the trust’s value when he or she turns 21, so these trusts are frequently used to fund educational expenses, although they usually allow the trustee to spend money on behalf of the beneficiary for any reason.
  • “Crummey” trust
    A “Crummey” trust can be used to make annual exclusion gifts of up to $13,000 each year to the beneficiary (married spouses can give a total of $26,000). To make the gifts in trust qualify for the annual exclusion, the beneficiary must be given a withdrawal right or “Crummey power” for a period of time after the contribution is made. Crummey trusts are frequently used to fund education but can be written more broadly to provide for any needs of the beneficiary.

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The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Securities are offered by J.P. Morgan Securities LLC. ("JPMS"), member FINRA and SIPC. When JPMS acts as a broker-dealer, a client's relationship with us and our duties to the client will be different in some important ways than a client's relationship with us and our duties to the client when we are acting as an investment advisor. A client should carefully read the agreements and disclosures received (including our Form ADV disclosure brochure, if and when applicable) in connection with our provision of services for important information about the capacity in which we will be acting.

This document provides information about the brokerage and investment advisory services provided by J.P. Morgan Securities LLC ("JPMS"). The agreements entered into by and disclosures provided to clients with respect to the different products and services provided by JPMS should be carefully read (including our Form ADV disclosure brochure, if and when applicable), which contain important information, including our provision of services for important information about the capacity in which we will be acting. We encourage clients to speak to their JPMS representative regarding the nature of the products and services and to ask any questions they may have about the difference between brokerage and investment advisory services, including the obligation to disclose conflicts of interests and to act in the best interests of our clients.

Annuities are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

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