Parents: Scholars Choice was designed to help parents save for college expenses. The power of tax-deferred compounding, which we’ll talk about more later, can help you meet your savings goals quicker. In addition, your savings are invested with one of the oldest and most well-established names on Wall Street: Salomon Smith Barney.
Grandparents: Through special gifting and estate-planning tax advantages, Scholars Choice lets grandparents help their grandchildren while they help themselves:
As in the past, Grandparents can gift up to $10,000 per spouse for each beneficiary annually without paying gift taxes -- and that $10,000 is excluded from the account owner’s taxable estate. Through Scholars Choice, however, you can invest up to $50,000 (or $100,000 for married couples) per beneficiary in one year without gift taxes. Your gift is prorated over five years and, after five years, is fully excluded from your taxable estate.1 That can make Scholars Choice a powerful tool for estate planning.
Adults planning to return to school can also benefit from Scholars Choice: Scholars Choice offers people of all ages the flexibility to choose a tax-advantaged plan that can work for them.
1 Contributions between $10,000 and $50,000 made in one year can be prorated over a 5-year period without incurring gift taxes or reducing your unified estate and gift tax credit. If you contribute less than the $50,000 maximum, additional contributions can be made without incurring gift taxes, up to a prorated level of $10,000 per year. Gift taxation may result if a contribution exceeds the available annual gift tax exclusion amount remaining for a given beneficiary in the year of contribution. For contributions between $10,000 and $50,000 made in one year, if the account owner dies before the end of the 5-year period, a prorated portion of the contribution will be included in his or her taxable estate.
