Education Funding It is not uncommon for our clients to ask about the best way to plan for education expenses. Many of our clients would like to contribute to a child or grandchild’s future education in the most effective way possible. The most common way to contribute to education expenses is the 529 plan. The 529 plan (named after the section of the tax code that deals with them), offers certain tax advantages to parents (and other relatives) to save for their child’s college education. 529s are sponsored by states and some educational institutions. The benefits of these plans include control of the asset by an adult, tax deferred growth and, if used for post-secondary education, the funds withdrawn are tax free. Another advantage to the 529 plan is that it can be used to fund the education of trade work in addition to college.Before buying a 529 plan, you should inquire about the particular plan and its fees and expenses. You should also consider that certain states offer tax benefits and fee savings to in-state residents. Whether a state tax deduction and/or application fee savings are available depends on your state of residence. For tax advice, consult your tax professional. Non-qualifying distribution earnings are taxable and subject to a 10% penalty.