You Control the Account
- Is the owner of the account and has control over how and when Tuition Units are used.
- May change the Beneficiary to another qualified Beneficiary.
- May cancel the account and request a refund.
Once you open an account, you can invite the entire family, as well as friends, to contribute to your Beneficiary’s account. The Plan makes it easy for your relatives and friends to give Tuition Units to your Beneficiary on special occasions, such as holidays, birthdays and graduations. And though the family will help you save, you will control how the money is spent.
Are there any tax consequences of a contract cancellation or refund?
The earnings portion of a refund, if any, is subject to federal income taxes plus a 10% federal tax as well as any state or local taxes that may apply.
What are the tax consequences of transferring ownership of my account to a new Purchaser?
You should consult with a qualified tax advisor concerning the potential income, gift and estate tax consequences of a transfer of ownership of your account before carrying out such a transfer. Under Texas law, a Purchaser may not sell the contract.