Wisconsin Lawyer
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.
Sidebars:
by Sarah Henriksen
Sarah 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
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