Question about 529b accounts

How are the accounts set up? A 529 account has an "owner" and a "beneficiary". You are apparently neither and it wouldn't surprise me that you wouldn't get statements.

Having made the gift to the account, but not being the owner, you no longer have any rights to it whatsoever, and as a matter at least of privacy, they probably are not *allowed* to send you statements or confirmations unless the owner sets you up to get duplicates.

Since the kids are your nephews, you *could* have set up the accounts with yourself as the owner and them as the beneficiaries, but it sounds like that's not what you did.

See here for some nice info about who can be a beneficiary by relation to an owner, etc.

Anyway, if your sibling is getting statements, you just need to let the sibling know that you've made a contribution and would like to be informed when they get the confirmation. And if you want more input, you need to talk to your sibling.

You can always call AF and ask. The number is 800-421-0180. If they refuse to give you any info, it is because you are not the owner. AF is required by regulation to send out statements periodically even if there is no activity in the account (the dividend reinvestments count as activity, I believe). As Bread said, it sounds like you setup the account in a manner that disavowed all your rights and control.

On a side note, I'm guessing the AF plan you refer to is the one sponsored by Virginia. Morningstar consistently ranks it among the top five BROKER-sold 529 plans. Since it seems that you have no ability to move the plan, at least you can rest assured that the CPA appears to have been diligent in selecting a plan. IF the parents are the account owners, AND you still want to convince them to move the plan, I would read Morningstar's report first. Alot of 529 plans out there are just plain awful.

Sorry...

7673

It's what I *thought* I did, but clearly the CPA who set up the account s for me had other ideas. Again reinforces my desire to not do any more business with him. I'm going to make him fix it, and if he can't or won't then I'll probably abandon them and start new ones. (By abandon I just mean not contribute to them anymore.) Thanks for all the responses!

- Sharon "Gravity... is a harsh mistress!"

With the caveat that I do NOT do much 529 work at all -

Many brokerage houses and investment companies allow you to list someone as an "Interested Party". When they allow this they will almost always send a copy of the statements and confirmations to that interested party. This happens frequently when an accountant or attorney is working with the investment professional on behalf of the client and we're seeing it more and more with adult children being listed as interested parties for their elderly parents. The interested party has NO ABILITY to make any changes in what happens in the account nor can they take any money out - but it is a way to be kept abreast of what's happening in the account.

Not all companies allow this so you'll have to have the registered representative check with the investment company and see if its available. If so you will need the owner of record to sign off on you being included as an interested party.

On another note - unless your CPA was also a Licensed Securities Agent, this is what happens when you use unlicensed and unregulated agents. As a CPA, they may well understand that tax issues, but unless they are licensed for securities work AND they do a bit of it, listing an additional interested party is something that many outside the business aren't aware of.

Good luck, Gene E. Utterback, EA, RFC, ABA

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