Judy: ‘Re: Transferring UGMAs to 529 Plans – Everything you wrote is correct. BUT, one thing people should be aware of (and probably will be made aware of if it is coded as an “UGMA 529 Plan” is that money contributed to an UGMA or UTMA account is an IRREVOCABLE GIFT. Since 529 plans let you transfer money from one beneficiary to another (a nice benefit) you have to make sure you don’t do this if the money started as an UGMA. Let’s say you have 2 kids, John and Mary. You set up UGMAs for both of them with $10,000. Then you transfer them to a 529/UGMA Plan for each. John gets accepted at West Point. Fantastic – no tuition! So you think “No problem, I’ll just transfer the balance of John’s plan to Mary since he won’t need it. And a good thing, too, since Mary got into Harvard and I’m going to need every penny to pay for that!” Well, you can’t do this. The UGMA funds for John were an irrevocable gift to him. And 529 plan money has to be used for education. So let’s hope John goes to grad school.’
☞ Well, not exactly. Less tells me that an UGMA/UTMA or child ownership of the 529 plan simply means the parent/custodian cannot transfer the funds away from the child. But once John reaches the age of majority, HE can change the beneficiary from himself to his beloved sister. Also, 529 rules allow the distribution of funds without penalty to the extent someone qualifies for a scholarship. John can take a distribution, pay regular income taxes on the 529 earnings (which he would have had to do had the money been left in an UGMA), and have no penalty on any of the distribution. No grad school required.
JUST PLAIN UGH
Jay Fratz: ‘You’re so obviously pandering for some future candidacy. What are you running for?’
☞ I would never DREAM of running for office, and am grateful for those who have the energy and courage and public spirit to do so (at least those, on both sides of the aisle, with good motives, which I believe is most of them). But me? Never, ever, ever, EVER.
Bill Spencer: ‘So you’re a Tivo fan. Last year I decided that the idea of a hard disk VCR made sense for me and I started to shop. I determined that the MSRP for ReplayTV was about $200 higher than Tivo, but the programming services for ReplayTV are free instead of Tivo’s monthly or lifetime fee. Then I walked into Circuit City and saw that they were selling a 30-hour Tivo for $300, and a 30-hour ReplayTV for $400. BUT, the ReplayTV came with a mail-in rebate for $100, making the units equal in price. I snapped up the ReplayTV and have had no problems with it since.’
Rick Mayhew: ‘Your ‘TiVo’ is actually either a Sony or a Philips unit. TiVo is the software. Did you buy both models, or just one? Which model is causing you the problem — Sony or Philips, or both?’
☞ Philips. Lots of problems, which is doubly annoying because I have become so dependent on TiVo. Imagine having no telephone or refrigerator. OK, well, not THAT dependent. But just one order of magnitude less. I’ve been trading calls with TiVo hoping I might actually be able to get them to give us all a better deal when it comes to equipment problems. On the admittedly slim chance anything comes of it, I’ll let you know.
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