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LoneStar 529 as a Gift

Anyone in your child’s life can open or contribute to a LoneStar 529. It’s a great way to celebrate a birth, or any other special occasion throughout a child’s life. Grandparents, aunts and uncles, as well as friends, will know they are giving a gift that will be appreciated for years to come.

Opening a Plan as a Gift

Any U.S. citizen or resident alien 18 years of age or older can open a LoneStar 529 account with as little as $25, and benefit immediately from potential estate tax and gift tax advantages.

Making a Contribution as a Gift

Contributing to a child’s 529 plan creates opportunities that could pay off long after you make the gift.

Contributions to the Plan are generally considered a “gift” from the Account Owner or another contributor to the beneficiary under federal gift tax provisions. Individuals are currently permitted to exclude $16,000 per year per beneficiary (or $32,000 for a married couple) from the federal gift tax1. Alternatively, individuals can make a one-time contribution of $80,000 ($160,000 for married couples) using a special five-year election. These limits assume the contributor makes no other gifts to the beneficiary during the period.

You can contribute up to $16,000 ($32,000 for married couples) annually per beneficiary, or up to $80,000 ($160,000 for married couples) over a five-year period without triggering the Federal gift tax. Completed gifts are excluded from the participant’s estate, reducing potential estate tax obligations.

An Easy Way to Give

To make a gift so a Beneficiary’s account, follow the instructions on the gift coupon. After the contribution is credited, the Account Owner 2 receives a confirmation of your generosity.

1. If the Account Owner utilizes the special five-year lump sum exclusion and dies within five years of the funding date, the portion of the contribution allocable to the years remaining in the five-year period (beginning with the year after the Account Owner’s death) would be included in the Account Owner’s estate for Federal estate tax purposes. Clients should consult their tax advisor.

2. Non-Account Owners have no control over contributions. Only Account Owners may direct transfers, rollovers, withdrawals, investment changes and changes to the Designated Beneficiary.