You can redeem assets from an UGMA/UTMA (Uniform Gift to Minors Act/Uniform Transfers to Minors Act) account, but you may be liable for income taxes on any gains upon redemption. Once the UGMA/UTMA proceeds are used to contribute to a 529 plan, the minor of the UGMA/UTMA must be named both the Account Holder and the Beneficiary of the 529 Account and cannot be changed. For more information, please consult your financial consultant.

Yes. An UGMA/UTMA account can be liquidated, which would be a taxable event, and the money placed into a 529 account. The custodian on an UGMA/UTMA account has the obligation to use the assets for the benefit of the child. The custodian responsibilities for those assets would still apply.

If you have established a custodial account for a child under the Uniform Gift/Transfer to Minors Act (UGMA/UTMA), you may be eligible to liquidate those assets and deposit the proceeds into a NextGen Account. Certain restrictions may apply. See the Program Description in the Enrollment Kit for more complete information. You may be able to roll over assets from another qualified tuition program or an Education IRA to a NextGen Account.

Yes. However, there are tax and legal consequences that you should consider. The sale of assets in the UGMA/UTMA may be considered a taxable event. You should consult your tax/legal advisor concerning any consequences of withdrawing the funds from their existing investment. In addition, the beneficiary of the UGMA/UTMA must be the beneficiary of the 529 account and cannot be changed. The account will continue to be governed by UGMA/UTMA laws.

The minor on whose behalf the account has been established is the owner of the account. However, until the minor reaches the age of account termination under applicable state laws and in accordance with the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA), there must be a custodian listed on the account. If the minor dies prior to reaching the age of account termination, the account is included in the minor's estate.

Many (but not all) 529 plans accept funds coming from an existing UTMA or UGMA. However, because these funds belong to the minor under a custodial arrangement, any withdrawals from the UTMA/529 account must be for the benefit of that minor only. Program rules and state laws will generally prevent you from making any beneficiary changes to the UTMA/529 account, and the minor will assume direct ownership of the account when the custodianship terminates at the age of majority.

Funds invested in an UGMA or UTMA account (Uniform Gift to Minors Act/Uniform Transfer to Minors Act) belong to the minor. The custodian has a legal obligation to use the funds solely for the benefit of the minor. To maintain the proper ownership of these funds, a GET account must name the minor as both the account owner and the student beneficiary. You also will need to name a custodian or trustee to manage the account on the minor's behalf.

Named for Section 529 of the Internal Revenue Code, these plans help individuals and families save for college in a tax-advantaged way.

While all states offer some type of 529 plan, there’s no requirement that you pick your own state’s plan. It’s best to compare plans and their differences. For example, some state plans, such as California, do not currently offer income tax deductions for plan contributions. In this case, other state’s plans may have lower costs or more attractive investment features.

With the passing of the tax law in August 2006, you pay no federal taxes on withdrawals used for qualified college education expenses, making a 529 an even smarter choice for savings. For more information, see Schwab Article Pension Bill Lifts 529 Cloud.

You can Open An Account online. To fund your account using the online enrollment process, you can set up an automatic investment from your bank account, or Schwab brokerage account. You can also open an account by downloading the account application. To do so, simply download the Schwab 529 application. If you need assistance completing the online enrollment form, call a Schwab 529 Specialist at 888-903-3863.

Cash out the bonds and reinvest the money in the savings plan. At tax time you'll want to file IRS Form 8815 to exclude the savings bond interest from income taxes. You also must make sure that the savings-bond rollover conforms to all the rules and that your income doesn't exceed the limit. Visit the TreasuryDirect Web site for more details.

Yes. This falls within the definition of an economic interest.

Generally rollovers are allowed. For instance, if the beneficiary of the account decides not to attend a post-secondary institution, the account owner can typically transfer funds in the account to another eligible beneficiary. To avoid penalty and income tax, the new beneficiary must be a member of the family of the original beneficiary. Additionally, you should check with the program you participate in to determine if there are other requirements that may apply.

Since only cash can be contributed to a 529 plan, the bonds would have to be liquidated. Series EE or I-Bonds purchased after 1989 may be converted tax-free to a 529 plan if the eligibility requirements are met to do so. Yes. Contributions may be made to both an Education Savings Account and a 529 plan account in the same year.

Schwab’s 529 Plan offers 10 different investment options—each carefully built on our asset allocation models and comprised of well-known mutual funds from multiple fund families to assure diversification across stocks, industry segments and investment styles.

A Section 529 state college savings plan is a special state administered college savings program that adheres to various federal laws and the Internal Revenue Code Section 529. These plans allow investors to save money in a special account in which the earnings will grow income tax deferred and when used to pay for "qualified higher education expenses" will be federal income tax-free.