Many parents create 529 plans in order to provide for the college education of their children. Essentially, a 529 plan is a tax-advantaged, education savings plan. As a recent article explains, parents who create 529 plans need to include them in their estate plan.
When a person creates a 529 plan, he or she has the option of naming a successor in the event that he or she dies or becomes incapacitated before the funds have been distributed. Parents should select a successor who they trust to carry out their wishes. If a parent fails to name a successor for their 529 plan, they face the risk that a stranger will control and distribute the plan for them.
If you have set up a 529 plan, check the documentation to determine whether you named a successor. If you did not name a successor, ask the provider of your 529 plan for a successor designation form. Realize that, if the successor should take over the account, he or she will have the authority to make decisions on how the money is invested. He or she will also be able to determine how the beneficiary can use the funds, and can even change the beneficiary.
