How can my family make best use of an education IRA?
A. There can be a number of education IRAs for any student. Various family members, such as grandparents, aunts and uncles, and siblings–and persons outside the family–can contribute to separate education IRAs for a student. The original student beneficiary for the education IRA can be changed to another family member, such as a sibling–for example where the original beneficiary wins a scholarship or drops out. Funds can be rolled over tax-free from one family member’s education IRA to another’s–for example, to avoid distribution when the first family member reaches age 30. The student can waive tax-free treatment on education IRA distributions in favor of the education tax credit (where applicable), to save more tax.
