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Vol. 75, No. 10, October 2002

Enhancements Improve EdVest

EdVest, Wisconsin's 529 college savings plan, has new features that make it even more attractive to potential investors.

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by Sarah Henriksen

Sarah HenriksenSarah Henriksen is director of education planning for Strong Capital Management Inc. in Menomonee Falls.

Wisconsin has been improving its college savings plan since it was last described in the August 2000 Wisconsin Lawyer, and investors are taking notice. The state's 529 plan, so called because of the IRS tax code that created it, has more than 100,000 accounts and $425 million invested.

The state budget repair bill passed in July makes grandparents eligible for the state tax deduction that previously was reserved for parents. Effective for contributions since Jan. 1, 2002, a $3,000 state tax deduction is available each year for contributions made to an EdVest account on behalf of each dependent or grandchild. Additionally, money invested in EdVest grows tax-deferred each year, and qualified withdrawals are now federal and state tax-free.

The program was relaunched in May 2001 with more investment options managed by Strong Capital Management of Menomonee Falls, Wis. Investors choose from seven investment options ranging from an all-bond portfolio of mutual funds to an age-based option that automatically grows more conservative as the child nears college.

Additional features of EdVest include:

  • No residency requirement
  • Flexibility to use savings at schools nationwide - even technical and graduate schools
  • Low investment minimums ($25 per month) and high maximums (invest up to $246,000)
  • No income restrictions to participate
  • Accelerated gifting from estates - contributions of up to $55,000 for an individual or $110,000 for a couple can be made in one year with the gift being prorated over five years
  • Indefinite control over how savings are used
  • Limited financial aid consequences, including no impact on Wisconsin state financial aid

To open an account for a child, grandchild, or even yourself, visit www.EdVest.com or call (888) 338-3789.

2001 Wis. Act 109, the budget reform legislation, can be accessed online at www.legis.state.wi.us PDF 1.62 MB

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