Rollover from 529 to ABLE (529A)

Forum|Forum|5 years ago
December 6, 2020
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I'm looking to do an indirect rollover from a 529 to an ABLE account. I am the owner of the 529 while my child is the beneficiary. Under ABLE, I understand that the owner and the beneficiary must be the same person. It it therefore necessary for the withdrawal from the 529 be made in my child's name? If not, and considering that the rollover itself will be a non-taxable event, are there any tax implications or other good reasons to doing it in either my name or my child's name?

Carl11_2

Employee

I understand that the owner and the beneficiary must be the same person.

I can't find anything in any IRS pub that states that. I can find all kinds of stuff that states there is an "administrator" who has control of the account, and a "beneficiary" that will benefit from the use of the funds in the account. Nothing states they have to be the same.

It it therefore necessary for the withdrawal from the 529 be made in my child's name?

I can't find anything clarifying that one way or the other. If you are the administrator of the account, there's nothing I can find that states the withdrawal can't be in your name. Heck, if anything change the beneficiary to you prior to making the withdrawal. Otherwise, if you do a direct rollover then you don't need to change anything since the funds will not be distributed to you or the beneficiary. Instead, the check will be made payable directly to the new account "FBO" (For Benefit Of) the administrator of the new account, or the named beneficiary of the new account. (Usually the beneficiary)

Laws can differ state to state. You should work directly with the institution that will have the new account, as they will be better informed on this than you or I will.