Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
164A.700,
164A.707,
26 U.S.C.
529
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
164A.704(1) requires the
board to promulgate administrative regulations to implement
KRS
164A.700 to
164A.709.
KRS
164A.704(6) provides that
the board shall develop requirements, procedures, and guidelines regarding
prepaid tuition contracts.
KRS
164A.707(2) authorizes a
purchaser to amend certain terms of a prepaid tuition contract, including
provisions of the prepaid tuition contract as permitted by the board. 2003 Ky.
Acts ch. 156, Part IX, Section 46, and EO 2003-652 transferred the governance
and administration of the Prepaid Tuition Program from the Department of
Treasury to the Kentucky Higher Education Assistance Authority. This
administrative regulation establishes the requirements for amending a prepaid
tuition contract.
Section 1.
Amendments in General. Any purchaser desiring to make an amendment to a prepaid
tuition contract as authorized in
KRS
164A.707(2) shall submit a
written request accompanied by the applicable administrative fee established in
11 KAR
17:100 to the office and comply with all other
applicable procedures relating to the amendment. A requested amendment shall be
subject to, and become effective upon, approval by the office.
Section 2. Change in Beneficiary.
(1) In accordance with
KRS
164A.707(2)(a), a purchaser
may amend a prepaid tuition contract to change the qualified beneficiary at any
time.
(2) In submitting a written
request to change the qualified beneficiary, the purchaser shall include proof
of Kentucky residency or a statement of intent for the new beneficiary as
required under
11 KAR
17:040, Section 2, and sufficient documentation
evidencing the relationship between the new and current beneficiary of the
prepaid tuition contract.
(3) If
amendment to a prepaid tuition contract changes the projected enrollment date
of a qualified beneficiary, the purchaser shall pay the additional amount
necessary to properly fund the amended prepaid tuition contract, as determined
by the office. The office shall notify the purchaser of any additional amounts
due and owing under the amended prepaid tuition contract.
Section 3. Change in Purchaser. A request for
a change in purchaser shall comply with the requirements established in this
section,
26 U.S.C.
529 and regulations thereunder.
(1) A purchaser may assign ownership of the
prepaid tuition contract to a successor purchaser upon acceptance of the
office. The assignment shall only be effective if the assignment:
(a) Is to a purchaser as defined in
KRS
164A.700(13);
(b) Is irrevocable;
(c) Fully and completely assigns all
ownership rights, title and interest including, without limitation,
reversionary rights and powers of appointment (i.e., power to substitute
beneficiaries) and the right to direct the distribution of benefits;
and
(d) Is in writing with
notarized signature of the purchaser and is accepted by the office.
(2) Upon the death, disability, or
marital dissolution of a purchaser, an assignment of ownership, and all rights
and obligations of a prepaid tuition contract, shall be made in accordance with
this section.
(3) Sufficient
documentation of the purchaser's death, disability, or dissolution of marriage
shall be submitted to the office, and the successor-in-interest shall accept
the status as successor-in-interest by notarized signature.
(4) A purchaser shall have the right to
designate a successor-in-interest to retain all rights and interest in his
prepaid tuition contract upon his death. Upon the death of a purchaser, all
rights and obligations of the purchaser under a prepaid tuition contract shall
be assigned to the named individual or entity as stated in the purchaser's
written designation accepted by the office. Absent written designation accepted
by the office, the purchaser's prepaid tuition contract shall be assigned to
the purchaser's surviving spouse.
(5) Upon disability of a purchaser, all
rights and obligations of the purchaser under a prepaid tuition contract shall
be assigned to the named individual or entity as stated in the purchaser's
written designation accepted by the office. Absent written designation, the
purchaser's duly appointed attorney-in-fact or court ordered legal guardian or
conservator, if applicable, shall become the purchaser's successor-in-interest.
Sufficient documentation evidencing the purchaser's attorney-in-fact or legal
appointment of guardian or conservator shall be submitted to the
office.
(6) A purchaser's prepaid
tuition contract may be assigned upon the marital dissolution of a purchaser
and his spouse in accordance with a court order assigning the prepaid tuition
contract in a form accepted by the office. Upon the dissolution of marriage of
a purchaser, all rights and obligations of the purchaser under a prepaid
tuition contract shall only be assigned pursuant to a court order assigning the
prepaid tuition contract to the purchaser's ex-spouse.
(7) Any assignment of a prepaid tuition
contract in accordance with this section shall be considered valid upon
approval by the office and the assignee shall then become the purchaser of the
prepaid tuition contract with all rights and obligations of the original
purchaser. Upon the valid assignment of a prepaid tuition contract in
accordance with this section, the prior purchaser shall retain no rights or
interest in the prepaid tuition contract.
STATUTORY AUTHORITY:
KRS 164A.704(1),
(6),
164A.707(2)(e),
2003 Ky. Acts ch. 156, Part IX, Sec. 46, EO
2003-652
