Education Savings Accounts

With the increasing costs of education it is prudent to save for those future college years. A Coverdell Education Savings Account (ESA) is a contemporary way to finance a beneficiary’s qualified education expenses for designated beneficiaries under the age of 18. A Coverdell ESA is a trust or custodial account established solely for the purpose of paying qualified education expenses for the designated beneficiary of the account. In general, the designated beneficiary of a Coverdell ESA can receive tax free distributions to pay qualified education expenses. The distributions are tax free to the extent the amount of the distributions do not exceed the beneficiary’s qualified education expenses.