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As the summer break stretches on, and the return to school is on the horizon, many of us contemplate the best way to provide future educational funds to our loved ones.
While our strategies may be different and unique to our own families, the intention is the same: One of the greatest gifts we can give the next generation is the opportunity to learn and grow without the burden of overwhelming student debt.
(…Ask me how I know?!)
It’s a gift that keeps on giving, and my husband and I thoroughly researched this issue ourselves in deciding what we felt was best for your children.
At our firm, we often talk with clients who want to help their children or grandchildren achieve their dreams, but aren’t sure where to start. I’ll compare and contrast two of the most common ways to prepare for future education costs here in Florida (the Florida Prepaid College Plan and the 529 Savings Plan) below.
Each offers unique benefits, and both can play a valuable role in your estate and legacy planning.
Here’s a helpful breakdown of how they are similar and what sets them apart, as well as pros and cons for both:
Florida Prepaid College Plan: Set it and forget it. The Florida Prepaid Plan lets you lock in today’s tuition rates at Florida schools. You pay a fixed monthly amount and your child (or favorite niece, no pressure) gets their tuition covered when the time comes.
This plan allows you to lock in today’s tuition rates at Florida public colleges and universities, giving you predictability and peace of mind. You can choose from several plans that cover tuition, fees, and even dormitory costs.
Pros:
Cons:
Summary: Florida Prepaid works well for families who plan to stay in-state and appreciate the security of a fixed cost. It’s especially comforting for grandparents who want to ensure a portion of their legacy is directed toward education with as little risk as possible.
529 Savings Plan: The 529 Plan offers greater flexibility and growth potential through market-based investments - kind of like a Roth IRA for education. You contribute post-tax dollars, they grow tax-free, and withdrawals are tax-free if used for qualified education expenses (including books, housing, and that terrifying first semester of organic chemistry).
Pros:
Cons:
Summary: The 529 Plan is a strong choice if you’re unsure where your loved one might attend school or if you want to support a wider range of educational goals, including graduate school or even trade programs.
One of the most important considerations for my husband and I was this: A recent change in federal law now allows you to roll over up to $35,000 in unused 529 funds into a Roth IRA for the beneficiary, starting in 2024 (certain requirements apply).
This means that even if your loved one doesn’t use the funds for school, the money can still help them build a secure future.
In estate planning, this kind of flexibility is invaluable. It ensures that your investment in your loved one’s future will never go to waste.
When you set up a Florida Prepaid or 529 Plan, it’s important to coordinate it with your estate plan.
Things to consider include:
These plans are more than financial tools—they are acts of future love and encouragement. Including them in your estate planning helps protect and preserve your intentions.
We’re here to help you make thoughtful decisions about your legacy.
If you’d like to discuss your estate plan or learn how to integrate an education savings strategy for your loved ones, we welcome the opportunity to talk with you.
Let’s make sure your planning reflects not just your assets, but your values, too.
Call us today to schedule your consultation or to learn more about how education planning can become a part of your family’s future.
Amanda "Planning Today, Protecting Tomorrow” Lynch Elliott
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