Contributing to a grandchild's college education is a wonderful legacy. Grandparents can also benefit from their good deed with NJBEST 529 College Savings Plan's outstanding gift and estate tax advantages, while retaining control over the plan. You also have the flexibility of changing beneficiaries at any time (new beneficiaries must be a family member of the prior beneficiary).

Gift and estate tax advantages

An annual contribution of up to $65,000 (or $130,000 if a married couple) can be contributed to one or more plans in a single year without owing federal gift tax so long as no additional gifts to that beneficiary are made for 5 years—that's 5 times the annual exclusion from taxable gifts. For example, the IRS considers the transfer as a $26,000 (if a married couple) contribution made each year of 5 consecutive years.

Furthermore, assets you have contributed to an NJBEST 529 College Savings Plan may not be included in your federal taxable estate.

Tax benefits may be conditioned on meeting certain requirements. Gift examples are general; individual financial circumstances and state laws vary-consult a tax advisor before investing. If the contributor dies within the five-year period, a prorated portion of contributions may be included in the taxable estate. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. See the Investor Handbook for more complete information.