Risks and Proposed Corrections for Section 529 Savings Accounts

Adam Winger (attorney, Birmingham, Alabama) has published his article entitled Pick on Someone Your Own Size: Exposing the Account Owner’s Silent Assault on § 529 Savings Accounts, 35 ACTEC Journal 277 (2009).

A synopsis of the article is below:

Under current law, noncontributing account owners of I.R.C. Section 529 savings accounts are given almost complete freedom to manage and control account assets.  Such freedom includes the ability to use contributed assets for personal, non-educational purposes.  Not only does this put at risk the designated beneficiary’s education, but it is entirely inconsistent with core transfer tax principles.  This article exposes these risks and proposes corrective measures to protect I.R.C. Section 529’s central purpose, encouraging education.