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Most 529 plans do not allow joint ownership, meaning only one person can be the account
owner, even if the owner is married. So what happens if the account owner dies? The
distressing answer is that the account would be tied up in probate unless a successor
participant is named.
A successor participant on your 529 account is the person or entity who will manage the
account for your beneficiary (the student you're saving for) in the event of your death. It's
important to assign someone this role so your heirs can avoid probate. Additionally, it's critical to
choose someone you trust, as your successor will have full control over the account, including
the right to change the beneficiary or make a nonqualified withdrawal.
The IRS expanded the definition of a 529 plan owner to include a trust as a person under the
statute. Accordingly, a revocable trust and even an irrevocable trust can open a 529 account or
be named as a successor owner of the 529 plan account.
Adding and changing a successor account owner is usually simple. Search the plan’s website
for an appropriate form or call their helpline.