What is an ESA?

An ESA, also known as a Coverdell Education Savings Account, is a way to save for your child's education on a tax-free basis. Contributions to an ESA are not tax deductible, but the investment earnings grow tax-free. By opening a self-directed ESA, you have the ability to grow the account faster than through traditional investments.

ESAs can be used to pay for educational expenses (tuition, books, fees) associated with qualified elementary and secondary schools, as well as higher education institutions.  The funds must be used before the account owner reaches the age of 30.

 

Important Features of an ESA Plan

  • Use the funds to pay for any educational institution or expenses
  • Not required to contribute yearly
  • Funds can be transferred to any eligible family member below the age of 30

 

What are the eligibility requirements for an ESA Plan?

To establish an ESA, the following requirements must be met:

  • Account beneficiary must be under age 18 or a special needs individual
  • Account must be opened with cash deposit

 

How do I determine an ESA Plan is the right plan for me?

  • Is education a priority for you and your family?
  • Do you want to help a child, niece, nephew, grandchild, or other young loved one save for college?
  • Do you want the flexibility to contribute some years, but not others?
  • Are you a savvy investor with unique knowledge of alternative investments?

If you answered 'yes' to all or most of these questions, an ESA may be a good choice for you.

 

Transfer or Rollover your funds to Entrust to get started

A self-directed ESA is different than a standard account because it allows you to have more investment freedom.  Self-directed ESAs offer the unique opportunity to hold alternative assets, such as real estate, precious metals, and more.  The earnings from these investments will grow tax-free, allowing you to save more for education expenses.

If you would like to transfer or rollover your existing ESA into a self-directed account, contact us today to get started.

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Before making contributions to an ESA Plan, learn the contribution limits that apply:

Click here to view the 2017-2018 ESA Contribution Limits