[Amy]

Recommendations for the best 529 plan? We live in Virginia and I need to set one up today.

-for a bit more context, our 13-year-old is getting a court settlement and the 529 info that I have access to is for a generational plan.

I want to put her settlement into one that is purely for her. She is named the beneficiary right now on the generational one, so we could put it in there.

But in case she does not use it all I would like this to go in one that is purely for her use.

You all are so great with all of this info. I super appreciate your time and recommendations.

Thanks so much.

[Terry]

Are you 100% certain she’d ONLY attend a VA college or university? I’m in VA and have a unique perspective to our involvement on BOV for an instate university.

My child ended up going out of state.

So, I’d suggest you verify with the 529 admin or if you’re using your existing financial advisor if the funds could be used at any university regardless of state.

A numerous amount of instate schools are almost impossible to get into now plus the culture at that university/college may not be a good fit, etc.

Just giving you some things to consider and I realize it’s tough to know now when she’s only 13. Best of luck.

Another idea: Just had a discussion with a contact (who is now in the south) whose son has a structured settlement since he was 3 yrs old and a victim of substantial car crash- received about the same amount as your daughter- she requested that the funds be invested and in a trust and only distributed at certain ages, so next he’ll receive a significant payout when he turns 30.

That’s a down payment on his first house. He’s currently in UGA law. Just another solution to consider.

[Cat]

Are you sure she might not want to use some of that money for something other than tuition?

Depending on the amount, I’d consider a different vehicle for all/most of it.

Especially if it’s a non-taxable settlement.

[Ryan]

Virginia’s plan is pretty good, and I imagine you’d want that for the state tax break.

We utilized that plan when we lived in VA.

[Stef]

Did an attorney tell you that putting her money into a 529 would be permissible under state law?

If no, I would consult with someone in your state right away about where and how the money should be held for her.

529s are typically owned by adults, not minors, her settlement is not your money.

And many would say that a minor’s money should only be put into certain safe investments.

[Capitan]

The best option as a resident is the states own invest529 plan, since it’s the only way you’ll get the 4k deduction, assuming you will continue to contribute further funds.

[Jennifer]

If you want the state tax deduction, you want to go with Virginia 529.
We had 4 accounts

(spouse and I each had one for each of our two kids) and maxed them each for max state tax deduction.

Worked well for us.

[Laura]

We are in VA but use vanguard. The state tax savings isn’t that much.

[Author]

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