What’s so great about the Coverdell education savings account?
Under the “old” tax law, not too much (despite the lure of tax-free income). In 2002, the Coverdell education savings account became a very attractive college savings vehicle for many people, including families that wish to save for elementary and secondary school expenses. In fact, even if you like the 529 plan you may still decide to contribute the first $2,000 of savings for each child into a Coverdell account. There are still some items to be aware of, however, such as the following: There are certain eligibility requirements in the year you wish to contribute to the Coverdell account, which means that not everyone will find them useful. For example, the age limits mean that older adults with college plans may not be eligible. In 2002, the contribution limit increased from $500 per child to the much more reasonable level of $2,000. However, you need to be careful accounts established by different family members for the same child do not cause total contributions to exceed $2,000 or
