Franklin Templeton 529 College Savings Plan has features to help your clients achieve their college savings goals. Download the brochure or check out our FAQs and talk to your clients today.
Three risk-adjusted options including conservative, moderate, and growth.
With A, C, and Advisor share classes, choose pricing to match client needs.
Download the form and help clients find the most appropriate 529 plan. (Note: Confirm NAV Rollover availability with your firm. )
Make it easy for clients to quickly schedule payments from their Franklin Templeton 529 account.
An exclusive crowdfunding tool to help your clients quickly and easily encourage additional 529 contributions from family and friends.
Savings can be used for any qualified tuition expense. Additionally, for accredited higher education schools (e.g. college, vocational schools, and certified apprenticeships), savings can be used for additional qualified expenses including mandatory fees, supplies, books or other required equipment, and room and board, if the beneficiary is enrolled at least half-time.
In addition, up to $10,000 may be paid toward principal or interest of a student loan for the beneficiary or a sibling.1
The beneficiary can be changed to a member of the immediate or extended family (including siblings, grandchildren, nieces, nephews, cousins and more).
The account owner—not the beneficiary—maintains control of the assets, including how and when they will be used.
Franklin Templeton 529 College Savings Plan allows account owners to open an account with as little as $25 and contribute as much as $305,000 per beneficiary over the lifetime of the account. 2
529 savings can be used at most accredited two- and four-year colleges and universities and vocational schools, including many outside the U.S., as well as certified apprenticeships.
Additionally, up to $10,000 per year per beneficiary can be used for tuition for eligible public, private and religious primary and secondary educational institutions (K-12). At this time, it is not clear what, if any, expenses will be regarded as “tuition” in the case of public schools. 1
Anyone can open a plan regardless of his or her income.
Franklin Templeton 529 College Savings Plan offers a wide range of investment choices allowing you to invest your assets in the portfolio(s) that best suit your education savings goals.
Franklin Templeton 529 College Savings Plan offers features that make it a convenient way to save for college, including monthly automatic investment plans and portfolios that automatically rebalance as the beneficiary gets closer to college.
Earnings grow federal income tax-free, and earnings are free from federal income tax when:
Five years worth of gifts (up to $75,000 for an individual or $150,000 if a married couple) can be made at once to a 529 plan without owing federal gift tax, as long as no other gifts are made to the same beneficiary over the five years.
Students at New Jersey colleges or universities can receive a tax-free college scholarship worth up to $1,500, depending on how long the plan has been open.1
Plan assets of up to $25,000 won’t be included in determining a beneficiary’s eligibility to receive financial aid awarded by the state of New Jersey.3
Take advantage of the many benefits Franklin Templeton 529 College Savings Plan has to offer and help your clients start saving today.
The Franklin Templeton 529 College Savings Plan offers three different types of investment options: age-based asset allocations, objective-based asset allocations and individual portfolios.
As the beneficiary ages, the Age-Based Asset Allocations will automatically reallocate a percentage of assets out of equity-based funds (primarily stocks) into more conservative, income-generating funds (such as bond and money-market funds).
Asset Classes and Target Percentage Investments
(Actual % investments may vary +/- 5% from the target)
Domestic Equity International Equity Income Cash |
Get a detailed look at the tactical portfolio allocations.
These portfolios allow your clients to invest according to the amount of investment risk they're comfortable taking and the potential return characteristics they prefer. Choose among 5 portfolios.
Franklin Income Fund | |
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Franklin Mutual Shares Fund | |
Templeton Growth Fund |
Franklin Growth Opportunities Fund | |
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Franklin Growth Fund | |
Templeton Growth Fund | |
Franklin Mutual Shares Fund |
International Equity | |
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Domestic Equity |
Domestic Equity | |
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International Equity | |
Income | |
Cash |
Income | |
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Cash |
Individual portfolios are available to create an asset allocation mix to suit your client’s personal college investing needs.
The Franklin U.S. Government Money 529 Portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency and it is possible to lose money by investing in the portfolio.
Investment earnings accumulate tax free, and withdrawals are tax free as long as they’re used to pay for qualified education expenses (such as tuition, fees, books as well as certain room and board expenses) at eligible educational institutions. Contributions are not tax deductible.
Your clients may contribute up to $2,000 annually to a Franklin Templeton Coverdell ESA on behalf of a designated beneficiary under the age of 18. Contributions cannot be made after a child turns 18 (except in the case of a Special Needs Beneficiary).
A Special Needs Beneficiary is an individual who, because of a physical, mental or emotional condition (including a learning disability), requires additional time to complete his or her education.
Your clients can contribute to both a Coverdell ESA and a 529 college savings plan on behalf of the same beneficiary, as long as assets are not used to pay for the same qualified expenses.
Any individual whose modified adjusted gross income (AGI) is less than $95,000 (single) or $190,000 (joint) can make a full annual contribution of $2,000. Reduced contributions are allowed for individuals with AGIs between $95,000 and $110,000 (single) or $190,000 and $220,000 (joint).
The deadline to make contributions to a Franklin Templeton Coverdell ESA is your client’s tax-filing deadline (usually April 15), not including extensions.
Assets in the account must be distributed to the designated beneficiary by age 30, or transferred to another Coverdell ESA for the benefit of another eligible family member — except in the case of a Special Needs Beneficiary.
Distributions for qualifying education expenses are tax free. If the distributions are more than the beneficiary’s qualified education expenses for the tax year, a portion of the distribution will be taxable to the beneficiary.
A $15 maintenance fee will apply, regardless of the number of funds your client chooses. This fee is automatically deducted from their account each year, unless they pay the fee separately by check.
Franklin Templeton is one of the largest mutual fund organizations in the U.S., offering a variety of professionally managed mutual funds covering every major asset class. Whether your clients’ risk/reward profile leads to a conservative, moderate or aggressive asset allocation plan, Franklin Templeton Investments offers funds to meet their investment needs.
Before your clients invest, they should carefully consider a fund’s goals, risks, charges and expenses. This and other information is contained in the fund’s prospectus. Please have your clients read the prospectus carefully before they invest or send money.
To establish a Franklin Templeton Coverdell ESA, simply complete the Coverdell ESA account application and return it to us. You can also access individual forms on our Forms and Applications page.
Call us at (800) 527-2020 and help your client start saving for education expenses today.
Franklin Templeton Coverdell Education Savings Account (ESA) is designed to help accumulate assets for a child's elementary, secondary and post-secondary education. It can help your clients pay for qualified education expenses such as tuition, fees, books, supplies, and certain room and board costs at eligible elementary, secondary and post-secondary educational institutions.
UGMA and UTMA accounts allow your clients to invest for a child’s education while taking advantage of the child’s potentially lower tax rate.
A way you can transfer assets to a minor under the Uniform Gifts to Minors Act (UGMA) and/or Uniform Transfers to Minors Act (UTMA). Most states have established these acts, allowing adults to transfer assets to a minor.5
The Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) allow a minor to own securities in an account without forcing families to underwrite the expense of having an attorney draw up a special trust.
While UGMA and UTMA accounts are not specifically designed to provide financing for college, many investors use them for this purpose because the assets become available to the minor when he or she reaches the age of majority specified under the state's UGMA or UTMA law (See “Age of majority in your state” below).
UGMA and UTMA accounts are similar in many ways, but they differ in the type of assets you can transfer to them.6
Similarities:
Both are managed by custodians.
Parents, grandparents, relatives and friends can make irrevocable transfers in any amount to the account.
If the donor, acting as custodian, dies before the funds are turned over to the child, the account may be taxable as part of the donor’s estate.
Differences:
UTMA law allows virtually any kind of asset, including real estate, to be transferred to a minor.
UGMA law limits gifts/transfers to bank deposits, securities (including mutual funds), and insurance policies.
A donor’s income taxes may be lowered by transferring income-producing assets to a child, who is likely to be in a lower tax bracket. If a parent, acting as custodian dies before the funds are turned over to the beneficiary, the account may be taxable as part of your client’s estate.
INCOME LIMITS | UNDER AGE 18 | AGE 18 YEARS AND OLDER |
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First $1,050 of unearned income | Exempt | Exempt |
Second $1,050 of unearned income | Taxed at child’s rate | Taxed at child’s rate |
More than $2,100 of unearned income | Taxed at the higher of the child’s or parents’ rates | Taxed at child’s rate |
The first $1,050 of the account’s unearned income (interest, dividends or capital gains) is exempt from federal income tax if the child is under age 18 at the end of the tax year. The second $1,050 of unearned income is taxed at the child’s rate. Any unearned income over $2,100 is taxed at the higher of the child’s or parents’ marginal tax rates.
It’s important to note that all assets transferred under UGMA and UTMA law represent irrevocable transfers. This means that the child owns the assets even if he or she decides not to go to college.
Upon reaching the age of majority under the state UGMA/UTMA law—usually 18 or 21, depending on the state—the child (minor) gains control of the assets and may use them as he/she sees fit.6
Keep in mind that an UGMA or UTMA account may affect the amount of financial aid your child receives. Therefore, some parents invest in their own name instead of the child’s because when it comes to qualifying for financial aid, parental income is less important than the child’s. Custodians may, as permitted by law, use UGMA and UTMA assets for the benefit of the child prior to completing financial aid forms; hence, parents receive the tax benefit and avoid losing financial aid.
Tax benefits are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. 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 their taxable estate. See the Investor Handbook for more complete information.
1. Federal tax law provides that up to $10,000 per year may be withdrawn from a 529 savings plan federal income-tax free, if used for tuition expenses at private, public or religious primary and secondary (K-12) schools. It is not currently clear what public K-12 school costs, if any, will be regarded as tuition for this purpose. Additionally, amounts paid as principal or interest on certain existing loans of the Beneficiary or their sibling, subject to various limits including annual limits, can constitute qualified distributions. State tax benefits and treatment of withdrawals for K-12 tuition and loans may vary by state, may not have been updated for changes in federal tax law and may be uncertain; consult a tax professional concerning your state.
2. Please refer to the Investor Handbook for more information.
3. Investing in the Franklin Templeton 529 College Savings Plan does not guarantee admission to any particular elementary or secondary school or to college, or sufficient funds for elementary or secondary school or for college. The scholarship is only available for college and is awarded during the beneficiary’s first year of college.
4. Effective at the close of market on August 26, 2016, Franklin Flex Cap Growth Fund was closed and was reorganized into Franklin Growth Opportunities Fund. For more information on these changes, please contact your financial advisor or call Franklin Templeton Investor Services at (800) 632-2301.
5. All states except for Vermont and South Carolina have adopted UTMA law, which has superseded UGMA law.
6. Some states may have special provisions, such as a different age of termination under UTMA for certain types of transfers, or provisions that permit the donor or transferor to extend the age of termination at the time the gift or transfer is made.
Investors should carefully consider plan investment goals, risks, charges and expenses before investing. To obtain the Investor Handbook, which contains this and other information, call Franklin Templeton Distributors, Inc., the manager and underwriter for the plan, at (800) DIAL BEN® / (800) 342-5236. You should read the Investor Handbook carefully before investing and consider whether your or the beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in its qualified tuition program.
This material is not a recommendation of any particular security, is not based on any particular financial situation or need, and is not intended to replace the advice of a qualified attorney, tax advisor, investment professional or insurance agent. Before making any financial commitment regarding a Section 529 college savings plan, consult with the appropriate financial advisor.
Franklin Templeton 529 College Savings Plan is offered and administered by the New Jersey Higher Education Student Assistance Authority (HESAA); managed and distributed by Franklin Templeton Distributors, Inc., an affiliate of Franklin Resources, Inc., which operates as Franklin Templeton. No federal or state guarantee. Principal value may be lost, and investing in the plan does not guarantee admission to any particular primary or secondary school or to college or sufficient funds for primary or secondary school or for college. Please refer to the Investor Handbook for more complete information.
See the Investor Handbook for more information on Franklin Templeton 529 College Savings Plan, including sales charges, expenses, general risks of the Plan, general investment risks and specific risks of investing in Plan portfolios, which can include risks of convertible securities; country, sector, region or industry focus; credit; derivative securities; foreign securities, including currency exchange rates, political and economic developments, trading practices, availability of information, limited markets and heightened risk in emerging markets; growth or value style investing; income; interest rate; lower-rated and unrated securities; mortgages, asset-backed and credit-linked securities; life settlement investments; restructuring and distressed companies; securities lending; smaller and midsize companies; and stocks.