Education funding
Investment decisions are highly personal. Moreover, planning and saving early is important when it comes to education funding. With extensive expertise and a variety of products, Frost can help you navigate your options to make smart, informed choices so you can reach your savings goals.

529 plans
529 plans have been a useful tool for education savings for many years. Recently, several modifications have enhanced their benefits when it comes to savings. In addition to earnings not being taxed, withdrawals are tax-free when used for eligible education expenses.
- Can be used for a wide range of expenses, including K-12 private school or trade school in addition to college tuition
- Any third party can contribute and there is no annual contribution limit*
- No beneficiary age restrictions and beneficiaries can be changed
- Beginning in 2024, any unused funds can be converted to a Roth IRA in the beneficiary’s name

Coverdell accounts
A Coverdell education savings account (ESA) helps you save for educational expenses while enjoying similar tax advantages of the 529 plan: contributions aren’t tax deductible, but earnings on growth are. Like 529 plans, Coverdell ESAs can be used to fund any education expense (such as private secondary school) — not just college.
- Can be used for all educational expenses, starting with kindergarten
- Contributions must be made in cash and are not deductible
- Contributions are limited to $2,000 annually
- Must be used by the time the beneficiary is 30 years old
- No annual restrictions on changing investment allocation

Custodial accounts
Though not solely intended for educational expenses, custodial accounts (Uniform Gifts to Minors Act, or UGMA; Uniform Transfers to Minors Act, or UTMA) are a tax-preferred way for parents, grandparents and other relatives to transfer assets to a child. When the child turns 18 or 21, depending on the state of residence (21 in Texas), they can use these assets however they wish, including for college.
- Assets and income are owned by the child, not the custodian
- Assets and income are taxed at the child’s rate (over a certain threshold, they are taxed at the parent’s rate)
- May impact a child’s eligibility for financial aid
- Doesn’t have to be used for educational purposes

Who can contribute
Open an account
To open an education savings account, a custodial account or to speak with a Frost wealth advisor about your educational savings goals, give us a call at (888) 268-9202.