Monthly Update for Administration of Trusts and Asset Management.

Kelli Bass |

It is our hope that our Monthly Update will be helpful for you to better understand the administration of trusts and asset management from a Trustee and Investment Advisor’s viewpoint.


Would you like to invest in your children or grandchildren’s future?  If so, here is a strategy worth considering.  While we are certainly proponents of education planning through your trusts, there are other advantages to an Oklahoma 529 College Savings Plan (“Plan”).


529 College Savings Plans let family members and others set aside funds for a child’s future college expenses so long as he/she attends a qualified educational institution.  The earnings will accumulate tax deferred and no federal or state taxes will be due on qualified withdrawals.  Only one current beneficiary is allowed per account but you can create as many accounts as you have children or grandchildren. 


By contributing to a 529 College Savings Plan, you are making a gift to your child or grandchild and, thus, reducing your taxable estate.  Currently, you can gift up to $17,000 per year, per beneficiary ($34,000 if you and your spouse both join in the gift).  If you wish, you can make five years’ worth of contributions to the plan all at once.  Your gift can be treated as being spread over five years for gift tax purposes.  However, if you choose to do this, you should be mindful of making any other gifts to that same beneficiary during the 5-year period.  If you were to gift over the allowed annual amount, it would be considered a taxable gift unless you were to allocate it towards your lifetime gift-tax exclusion.


As long as the funds from the Plan are used for qualified education expenses, withdrawals for these expenses are tax-free.  Qualified education expenses include tuition, required fees, room and board, books, supplies and computer-related expenses.  Should the beneficiary receive a scholarship(s), the plan owner (donor) can withdraw funds up to the amount of the scholarship without incurring the 10% penalty or owing any income tax on the earnings portion.  


Qualifying educational institutions and programs include any accredited technical or vocational school, a two-year or four-year college or university.


In Oklahoma, individual taxpayers may deduct up to $10,000 ($20,000 per couple) in Plan contributions per year.  This is a separate benefit from the gifting benefits as discussed under the Estate Planning Tool section. 


Be mindful not to overfund the Plan.  It is a good idea to estimate the average cost of a post-secondary education for 4 years to get an idea of what you want the Plan balance to be at the time the beneficiary is to begin his/her post-secondary education.  However, don’t panic! You do have options if the entire Plan balance doesn’t end up being needed by that beneficiary. The best option is that a Plan owner can change the beneficiary to another family member, this includes another child or grandchild, niece or nephew, stepchild and foster child.  If there are no other family members who are eligible to benefit from the Plan, the Plan owner can withdraw the funds.  The earnings will be subject to a 10% federal penalty and state and federal income tax.


As a courtesy, we can assist you by reviewing your trust to give you a trustee’s perspective.  We do not offer legal advice and we offer this at no cost or obligation to you.  We can also offer a complimentary review your investment portfolio.  

WealthTrust Oklahoma is the Oklahoma Trust representative office of National Advisors Trust Company. We are independent and hold a federal charter.  In addition to trust administration services, we offer investment management services through our firm, WTO Advisors.

Alyssa Kaiser, CTFA, has over 30 years of experience in the trust, investment and banking industries and is President of WealthTrust Oklahoma and WTO Advisors.  Alyssa may be contacted at: (405) 241-1600 (office), or by email at