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Don Your Crown – Your Dynasty Awaits

Don Your Crown – Your Dynasty Awaits

Have you ever had grandiose visions of having your own dynasty? Turn that dream into a reality with a 529!

Ok, you won’t have control over a nation or hand your children a colony of loyal subjects but you can create a long-lasting educational legacy for generations to come. Join Matt Robison and I on this week’s podcast where we discuss funding your children’s education, and their childrens’ education, or someone else’s kid’s education! You can establish a dynasty using 529 plans. 

A 529 plan is a tax-advantaged savings account designed for educational expenses. You can contribute to the account, invest the funds, and use the money tax-free for qualified educational expenses. These plans are incredibly flexible, allowing you to change beneficiaries and account owners, making them a powerful tool for long-term financial planning. For a more in-depth discussion on 529’s, check out a prior episode here

The dawn of your dynasty

Most people use 529 plans to save for their children’s college expenses. However, by shifting your mindset to generational thinking, you can use these accounts to fund education for your grandchildren and even great-grandchildren. This approach leverages the power of tax-free growth and compounding over decades.

Imagine pre-funding your kids’ college, then continuing to grow and transfer those funds for your grandkids and beyond. With the ability to contribute large sums and change beneficiaries, 529 plans can become a foundation for your family’s educational funding for generations.

Why 529’s for the future

529 plans offer several unique benefits that make them perfect vessels for dynastic wealth:

  1. Tax-Free Growth: Contributions grow tax-free, and withdrawals for qualified expenses are also tax-free.
  2. Beneficiary Flexibility: You can change the beneficiary of the account, allowing funds to be used by different family members over time.
  3. Owner Flexibility: You can even change the owner of the account!  It’s a very strange quirk that you can use to transfer responsibility for distributions.
  4. No Distribution Requirements: Unlike IRAs, 529 plans don’t have mandatory distribution rules, so funds can stay in the account indefinitely.
  5. Flexibility: 529 plans aren’t just for college expenses. They can be used for K-12 tuition, student loan repayments, and even rolled into Roth IRAs under certain conditions. 

As with any dynasty, there are downsides

While 529 plans are powerful, it’s essential to consider potential changes in laws and regulations. Currently, there are no requirements to distribute the funds, but that may not always be the case. Take, for example, the new regulation which allows you to roll-over 529 funds into a Roth IRA. While this is a benefit that makes the 529 even more appealing, there is nothing to say a regulation won’t be put in place that would have a negative impact. Additionally, be mindful of gift tax rules when transferring large sums or changing beneficiaries.

Heavy is the head that wears the crown

Establishing a dynasty through 529 plans involves changing your mindset from short-term savings to long-term, intergenerational planning. By leveraging the unique benefits of 529 plans, you can create a lasting legacy that supports your family’s educational goals for generations. Whether you’re a parent, grandparent, or future-minded investor, this approach can provide substantial tax advantages and financial security for your loved ones.


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Related Podcasts

Don Your Crown – Your Dynasty Awaits

Episode 148 •

08th July 2024