Three Things You Need to Know about 529s

1. You control plan assets

The person who opens the Franklin Templeton 529 College Savings Plan1 owns and controls its assets until he or she decides to withdraw them. Your clients can rest easy knowing they will control when and to whom the plan assets will be distributed.

2. It’s a valuable estate-planning tool

Contributions to a Franklin Templeton 529 College Savings Plan are generally considered completed gifts for federal gift-, estate- and generation-skipping transfer tax purposes, and they qualify for the $15,000 ($30,000 if a married couple) per beneficiary annual exclusion from taxable gifts.

In addition, clients may give up to $75,000 in 1 year ($150,000 if a married couple) and treat it as if it were given over a 5-year period, gift tax free, as long as no other gifts are made to the same beneficiary in that 5-year period.2

3. It can benefit anyone

A Franklin Templeton 529 College Savings Plan can be opened to invest for education2 for any family member, younger or older, plan holders or their spouses—even a friend. More than one plan may be opened for a single beneficiary, as long as the combined assets don’t exceed the maximum limits.

Good prospects include those who: 3

  • Have an income level that will keep their children from qualifying for need-based financial aid
  • Don’t have much time left to save for college and must accumulate assets quickly
  • Need to save for college and would also benefit by reducing their taxable estate
  • Have young children or grandchildren and can benefit from this plan’s long-term, tax-free growth opportunities
  • Want to control these assets
  • Are looking for professional help investing for education

Plus

Special Benefits For New Jersey residents

Clients wishing to help a current New Jersey resident pay for college will enjoy additional benefits by investing with Franklin Templeton 529 College Investing Plan.

The main advantages for your clients:

Earnings grow federal income tax-free, and earnings are free from federal income tax when withdrawn for qualified higher education expenses or used up to $10,000 per year for tuition for eligible primary and secondary schools2

Up to a $1,500 college scholarship. Franklin Templeton 529 College Savings Plan offers a scholarship rewarding students who pursue higher education in New Jersey. The participant must make a withdrawal for qualified educational expenses, meet minimum contribution thresholds and have been a participant in the plan for at least four years to qualify.3

ContributionFull Years Account OpenScholarship Amount
$1,200 4 $500
$1,800 6 $750
$2,400 8 $1,000

$3,000

10 $1,250
$3,600 12 $1,500

Please access the Investor Handbook for more information. Use the online Scholarship Request portal to apply. Contact the New Jersey Higher Education Student Assistance Authority (HESAA) at 609-588-3300 ext. 1323 or ext. 1338 with inquiries or issues.

Limited interference with financial aid. The first $25,000 of contributions to a Franklin Templeton 529 College Savings Plan will not be considered when determining a student beneficiary’s eligibility for financial aid awarded by the state of New Jersey.

Investors should read the Investor Handbook carefully before investing and consider whether their or their account 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.

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