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Education Planning

To parents with aspirations of sending their children to college or university, the costs associated with doing so can be daunting. For decades, the price of higher education has risen at a rate close to three times that of the Consumer Price Index. If this is a goal for you, we will help you estimate the total cost and help you develop a strategy to help ease the burden. Many education plans include using tax-advantaged investments that will lower your overall cost by lowering the taxes you need to pay. We can help you explore all the different options to get the right answer for you.


These strategies can include:

  • 529 Savings Plans. An investment account that grows tax free, and provides tax-free distributions if used for education purposes.

  • 529 Pre-Paid Plans. A program designed to prepay for tuition at schools in your home state, allowing you to "freeze" the cost from future inflation.

  • Coverdell ESA Plans. An investment plan in the child's name that grows tax free and provides tax-free distributions if used for education purposes.

  • UTMA / UGMA Accounts. Custodial investment accounts held for the benefit of a minor.

  • US Savings Bonds. Issued by the U.S. government, Series EE and Series I savings bonds offer a tax benefit when redemptions of the bonds are used for paying qualified education expenses.

  • IRA Accounts. Distributions from regular IRA accounts will avoid the 10% penalty if used for education purposes, although regular income taxes will still apply.

  • Roth IRA Accounts. Distributions from Roth IRA accounts will avoid the 10% penalty if used for educational proposes. Distributions up to the basis (amount contributed on an after-tax basis) will not be subject to regular income tax.

  • Personal Investment Accounts. No tax advantages, but allows for complete flexibility. Financial Aid Impact

Each college savings option has an impact on the financial aid process. As we compare the different options and design a plan of action with you, we will include these considerations, and help you maximize the probability of receiving the largest financial aid package possible.

Gift and Estate Planning Impact
The strategies also differ in the way they are treated in your estate plan: some are considered present value gifts, others could be included in the parent's estate if they should die.

At Legacy Wealth Partners, we pull these strategies together to create the best plan for you and your family. This often means using multiple strategies to optimize your tax efficiency, maximize the potential financial aid, while maintaining flexibility in case plans change.

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