College Planning

College Planning

College planning may be the biggest financial hurdle facing some parents. While saving for your own retirement, saving for your children’s college education may seem like an unattainable luxury. At CapWealth Advisors, we can incorporate college planning into your investment objectives, regardless of your current college savings plan.

Some parents begin thinking about college planning before their child’s birth. Some begin well into their childhood or adolescent life. Most parents of wealth want their child to obtain higher education to secure his own financial future. With the rise of annual college tuition, it may seem like a daunting task to start saving 10 or 15 years in advance, but CapWealth’s experts are experienced in helping clients plan prudently for future college costs.

At CapWealth, we work primarily (but are not limited to) the following educational funds:

529 accounts:

529 accounts are available in almost all fifty states and are the most common type of educational investment fund. Contributions made into a 529 grow tax-free and can be withdrawn tax-free as well as long as it’s used toward higher education. With this type of account, you remain in control of how the funds are distributed even after your child reaches the age of 18. Read President & COO Phoebe Venable’s Tennessean newspaper columns on 529 plans here and here.

Coverdell ESAs:

If you’re unfamiliar with ESAs, think about the way your Roth IRA operates. With ESAs, you are allowed to make contributions into the account tax-free, and, if taken out appropriately, withdrawals are tax-free as well. Many families of wealth have to consider payments not just for college, but elementary, middle, and high schools tuition too. ESAs are designed to cover these costs as well.

Educational Trusts:

Educational trusts are set up by your financial advisor and allow you to dictate how beneficiaries may use the funds. These types of educational accounts allow you to plan your child’s education more in-depth than other types of accounts. For example, you can dictate if the funds can be put towards medical school or a technical school, full-time, part-time, or even online classes.


Under the Universal Gifts/Transfers to Minors Act, minors can access securities in an account without the parents initiating the legal process of drawing up a trust. Unlike accounts that strictly contain securities, UGMAs and UTMAs allow the grantor to pass on other types of wealth.

There are always more considerations to think over before settling on a college investment account, like how it will affect your taxes, the maximum annual contribution limit, and its impact on need-based scholarships. That’s why we’re here to guide you through the college planning process and secure the appropriate educational account for your kids without sacrificing your retirement.