Many young parents and grandparents (among other generous family members) have established 529 plans for their children and grandchildren either through their preferred financial institutions or Pennsylvania's 529 program.
At the time of establishing the account, the individual must provide his/her information as the account owner, the beneficiary's information, and banking information. Unfortunately, a successor owner is typically not added at the same time. It is the responsibility of the parent or grandparent to "just know" that they need to add a successor owner after the account is established.
What is a successor owner?
A successor owner is an individual (such as the minor's other parent or grandparent) who will control the account in the event of the initial owner's death or disability. It's extremely important to name someone that you trust.
Why is this so important?
Having a successor owner named helps to ensure continued access to and management of the account for the benefit of the minor beneficiaries without subjecting the account to probate, incurring avoidable costs and taxes, and potentially putting the account into the hands of the beneficiary prematurely.
How can I name a successor owner?
This varies by institution. You may be able to make the change online or you may need to complete a paper form.
If you work with a financial advisor, you can contact your advisor directly.
If you do not have an advisor, you'll need to contact the financial institution to determine the appropriate steps.
If you manage your own plan through pa529.com, you should be able to make the change through your online account.
This is also a great time to make sure that your other account information is up-to-date and that your beneficiaries are properly listed. Reviewing your account details is an important part of keeping up with your estate plan.
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