How can having a Coverdell Education Savings Account (Coverdell ESA) help my child with educational expenses?
Coverdell ESAs (CESAs), formerly known as Education IRAs permit you to invest up to $2,000 each year for anyone under 18. These investments can only be redeemed for specific purposes, such as tuition, books, supplies, and room and board. Contributions, while nondeductible, are unaffected by other amounts you’ve contributed to your IRA. There are income eligibility limits. Currently, these are $150,000 for joint-return filers and $95,000 for single filers. If you are ineligible due to high income, others can make the contribution for you. Are the assets in my IRA plan exempt from creditors? Many states offer this protection, but this coverage only extends to state residents doing business with creditors based in those states. There is no national protection provision. If your creditor is the IRS, your IRA plan is fair game. That’s because Section 6334(c) of the Internal Revenue Code states “no property or rights to property shall be exempt from levy other than property specifically made
