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I was talking to someone regarding saving for college education. I mentioned that I was putting money into a 529 account but wasn't happy with this. My kids my not decide to go to college and therefore the 529 would incur penalties. They mentioned I should look at a 'Life Establishment Fund' I haven't been able to find much information on this but it seems to be like a Trust ?

Anyone have more information ?

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    Guessing, but I bet that's the name of a product they are pushing, i.e. it's not a particular IRS designation. And I bet it's sold by a life insurance agent, who has kids of his own that he'd like you to put through college. There, I said it. – JoeTaxpayer♦ Sep 12 '12 at 15:12
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    Google returns precisely 2 hits for the phrase "life establishment fund", both pointing at this question. I think you have the wrong name somehow. – DJClayworth Sep 12 '12 at 17:54
  • It wasn't an agent of any kind. It was just a friend who made a comment. I don't have any more information other than that. Would a trust not accomplish what I am after? – Web Sep 12 '12 at 23:31
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It's just money in an account somewhere with no tax shelter or string attached, to help maturing children (18-22ish) get a kick start in life whether they go to college or not. Basically, the money can be used for anything (for you or them). Or you can put it in a UGMA-type account where it's technically the child's funds and not yours (but check how college loans are calculated before dumping a bunch of money in those, I believe they are looked at differently, maybe as the first source of funds that gets tapped and could impact loan qualification).

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