Published on 07/10/2018 10:02 am

Children’s College Savings Accounts In Bankruptcy

 
 
 
 
 
A 529 plan [1] is a tax-advantaged savings plan designed to encourage savings for future college costs. The plan is so named as it is authorized by section 529 of the Internal Revenue Code. Some 529 plans are operated by a state while others may be operated by educational institutions. All 50 states offer at least one type of 529 plan which assists parents, grandparents and other relatives in providing payment toward the cost of college tuition.
 
When an individual is considering the filing of a Petition for Bankruptcy, the potential loss of a college savings account maintained for a child or grandchild must be considered by both client and attorney. In order to determine if a 529 college account will be safe after the filing of a bankruptcy, it is necessary to review both federal bankruptcy laws as well as statutes specific to the state of New York.
 
The filing of a bankruptcy petition creates an estate pursuant to 11 U.S.C. § 541
Read More
Law Office of Ronald D. Weiss, P.C.