Educational and Custodial Accounts

Saving for education-whether it's elementary school, high school, college, or all three-has never been easy and costs continue to rise. One of the keys to successful education planning is getting started early.

A Wachovia Securities Financial Advisor can help estimate the potential cost of educating your children, determine how much you need to save and help you choose the education savings option that's most appropriate for your needs.

529 College Savings Plans
First authorized by Congress in 1996, qualified state tuition programs, or 529 college savings plans allow states to offer investors professionally managed, tax-advantaged portfolios to help meet rising college expenses.1

Potential benefits:

  • Market-based returns from a portfolio of investments.
  • Complete control over withdrawals for the life of the account.
  • Proceeds may be used at any accredited post-secondary school in the United States.

Please consider the investments objectives, risks, charges and expenses carefully before investing in a 529 savings plan. The official statement, which contains this and other information, can be obtained by calling a Wachovia Securities Financial Advisor. Read it carefully before you invest.

Coverdell Education Savings Accounts
The Coverdell Education Savings Account allows parents, grandparents, friends, and even a child to save for higher education expenses tax-free.2

Potential benefits:

  • For parents who want to begin or increase a child's college fund.
  • For grandparents, relatives and friends who want to assist parents in paying for a child's education.
  • Contribute up to $2,000 per child annually until the child reaches age 18.

Custodial Accounts
A custodial account allows the parents to control the investments, yet the child is the owner of the account.

Potential benefits:

  • Each parent can give their child a gift of up to $12,000 (as of 2007) without incurring a gift tax by using the options under the Uniform Gifts to Minors Act.3
  • Funds can be put into a variety of investment choices.
  • Parents retain control until the child reaches the age of majority (which varies by state).
  • Under the Uniform Transfers to Minors Act, parents maintain control over the account for a longer period, and can make different types of investments.

10/07, 0707 - 54050

1 College savings plans offered by each state differ significantly in features and benefits. The optimal plan for you depends on your specific objectives and circumstances. In comparing plans, please consider each plan's investment options, fees and state tax implications. As with all tax-related decisions, consult with your tax advisor.

2 Qualified Coverdell Education Savings Account distributions are not subject to state and local taxation in most states.

3 Earnings on custodial accounts may be subject to the "kiddie tax" if the child is younger than 14 years old. Generally, earnings on the account are taxable at the parent's highest marginal rate.

Wachovia Securities does not provide tax or legal advice. Be sure to consult with your own tax and legal advisors before taking any action that may have tax consequences.

A Wachovia Securities Financial Advisor can help you determine which Financial Services program is appropriate for you.

Securities and Insurance Products: Not Insured by FDIC or any Federal Government Agency; May Lose Value; Not a Deposit of or Guaranteed by a Bank or any Bank Affiliate

Wachovia Securities is the trade name used by three separate, registered broker-dealers and nonbank affiliates of Wachovia Corporation. Retail securities brokerage services offered through Wachovia Securities, LLC, Member NYSE/SIPC and Wachovia Securities Financial Network, LLC, Member FINRA/SIPC. Corporate and Investment Banking services offered through Wachovia Capital Markets, LLC, Member NYSE, FINRA, and SIPC. A.G. Edwards is a division of Wachovia Securities, Member SIPC.