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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 Investments grow tax-free when withdrawn for qualified higher education expenses at any accredited college or university.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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