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I have 2 kids that I had coverdell accounts for. We never used them for school expenses because we thought they could be used to pay off loans which I now know we can't. Both of my kids are now over 30 and I just found out these funds should have been disbursed before their 30th birthdays. how should we proceed to closing these accounts with the least penalties?

  • When did they turn 30? Is there a younger family member that can be designated as the beneficiary? Such as do your kids have kids? see irs.gov/publications/p970#en_US_2019_publink1000178449 for a list of family members. – mhoran_psprep Oct 14 at 10:46
  • They turned 30 2 and 4 years ago. No one else to give it to. Was thinking it could be rolled over to a 520 plan which can then be used to pay off loans but not sure. – debbie Brennan Oct 15 at 4:01
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    I am surprised the bank or financial company didn't force them to liquidate the funds within 30 days of them turning 30. – mhoran_psprep Oct 15 at 9:57

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