Louisiana Administrative Code
Title 28 - EDUCATION
Part VI - Student Financial Assistance-Higher Education Savings
Chapter 3 - Education Savings Account
Section VI-313 - Substitution, Assignment, and Transfer
Universal Citation: LA Admin Code VI-313
Current through Register Vol. 50, No. 3, March 20, 2024
A. Substitute Beneficiary. The beneficiary of an ESA may be changed to a substitute beneficiary provided the account owner completes a beneficiary substitution form and the following requirements are met:
1. the substitute beneficiary is a
member of the family as defined under §107;
2. the substitute beneficiary meets the
citizen/resident alien requirements of §301. F, and, if the account owner is a
nonresident of the state of Louisiana, the substitute beneficiary meets the
applicable residency requirements (see §301. G);
3. if the substitute beneficiary is not a
member of the family of the previous beneficiary:
a. and the account owner is a natural person
classified under §303. A.1-5, the account must be refunded to the account owner
and a new account must be opened;
b. and the account owner is a legal entity
classified under §303. A.4 or 5, a new account shall be opened in the name of
the new beneficiary; and
i. these transfers
may be treated as refunds under federal and state tax laws in which case the
account owner will be subject to any associated tax consequences; and
ii. the EEs and interest thereon for an
account whose owner is classified under §303. A.4 will not be transferred to
the new beneficiary; however, the new account will be eligible for EEs for the
year the new account is opened;
c. and the account owner is classified under
§303. A.6, a new account shall be opened in the name of the new beneficiary
only if the beneficiary meets all the requirements of §303. A.6; and
i. these transfers may be treated as refunds
under federal and state tax laws in which case the account owner will be
subject to any associated tax consequences; and
ii. the EEs and interest thereon will not be
transferred to the new beneficiary; however, the new account will be eligible
for EEs for the year the new account is opened;
iii. the provisions of §301. A.2 shall apply
to account owners classified in accordance with §305. A.5.
B. Substitution/Transfer of Account Ownership. The ownership of an ESA is transferable only with the written approval of the LATTA and only as follows.
1. The account owner who is a natural person,
other than a natural person classified as an account owner under §303. A.6, may
designate a person who will become the substitute account owner in the event of
the original account owner's death. Eligibility for EEs will be based on the
substitute account owner's classification at the time of the original account
owner's death.
2. In the event of
the death of an account owner who is a natural person, other than a natural
person classified as an account owner under §303. A.6, who has not named a
substitute account owner, the account shall be terminated and the account shall
be refunded to the beneficiary, if designated to receive the refund by the
account owner, or the account owner's estate.
3. An account owner who is a legal entity
classified under §303. A.4 or 5 may indicate in the owners agreement that the
account shall be transferred to the beneficiary of the account upon his
18th birthday, or upon his enrollment in an eligible
postsecondary institution full time, whichever is later. If the account owner
transfers the account in accordance with this section, disbursements may only
be made for payment of the qualified higher education expenses of the
beneficiary.
4. In the event of the
dissolution of an account owner who is a legal entity classified as an account
owner under §303. A.4 or 5, the beneficiary shall become the substitute account
owner. If the account owner who is a legal entity classified as an account
owner under §303. A.4 or 5 is dissolved, the beneficiary designated to receive
the refund has died, and there is no substitute beneficiary named, the refund
shall be made to the beneficiary's estate.
5. In the event of the death or dissolution
of an other person classified as an account owner under §303. A.6, the
beneficiary shall become the substitute account owner, provided that all the
rights and restrictions provided in law and these rules regarding account
owners classified under §303. A.6, including, but not limited to, use of the
funds, refunds, terminations, designation of beneficiary, etc., shall be
applicable to the beneficiary that becomes the owner of an account established
under §303. A.6. If an account owner classified under §303. A.6 dies or is
dissolved and the beneficiary has died or failed to enroll in an eligible
educational institution by age 25, and no substitute beneficiary has been
designated by the account owner, the LATTA shall designate a new beneficiary
who must meet the requirements of §301. A.4 and §303. A.6.
C. Assignment of Account Ownership. Ownership of an ESA cannot be assigned.
D. Changes to the Owner's Agreement
1. The
account owner may request changes to the owner's agreement.
2. Changes must be requested in writing and
be signed by the account owner.
3.
Changes, if accepted, will take effect as of the date the notice is received by
the LATTA.
4. The LATTA shall not
be liable for acting upon inaccurate or invalid data which was submitted by the
account owner.
5. The account owner
will be notified by the LATTA in writing of any changes affecting the owner's
agreement which result from changes in applicable federal and state statutes
and rules.
AUTHORITY NOTE: Promulgated in accordance with R.S. 17:3091-3099.2.
Disclaimer: These regulations may not be the most recent version. Louisiana may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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