Monerey County Herald:

Q: We are grandparents and would like to start a fund to help our grandchildren go to college. How do the College Savings Plans that you have been writing about fit with my estate planning?

A: In my past two columns, I explained that Section 529 College Savings Plans, governed by Internal Revenue Code Section 529, allow you to save money for someone's college education without paying income tax on the account's earnings (interest, dividends, or capital gains). I listed criteria to help you find the best 529 Plan.

When Congress designed the College Savings Plans, it created unique, clever and favorable tools for you to use in your estate planning.

First, I'll define the players in the 529 Plan game. First, we have the account owner. They make the investment decisions for the account and have the power to change the beneficiary and withdraw money from the account.

The second player is the successor owner, who sits on the bench until the owner gives up ownership because of death or other acceptable reason.

The third player is the contributor, who funds the account with money (cash or check). Often, the contributor is the owner. The fourth player is the beneficiary, or the person who gets to use the money in the account for qualified higher education expenses. Normally the beneficiary is a child, but can be an adult.

Now for the estate planning benefits