Hello, I am at my wits end so I’m coming here to see if anyone has dealt with this before or has any suggestions that might help me here.
Brief overview: my wife has unused funds in her old 529 and we are trying to transfer ownership of the account from her parents into her name so that we can start using those funds for our daughter’s education. (I know we could just change the beneficiary to my daughter and leave the acct ownership the same, but my in laws just want it all off their plate so they don’t have to deal with the logistics of it anymore).
The problem is that EVERY institution we have tried to do this through requires a medallion stamp to process a change of ownership. However, they require both parties to have an established relationship with the same bank/credit union for at least 6 months in order for them to verify us. My wife and I don’t use any of the same institutions as her parents so no one is willing to do it for us.
At this point, it seems like our only option is to open an account with their credit union and just wait 6 months then try this all again. That seems insane to me so I am wondering if anyone else has dealt with this or if I can pick up any advice/suggestions.
Some more background:
– my FIL is named the account owner. He is legally mentally incapacitated
– my MIL has durable power of attorney
– we live in different states (FL and SC) so it is very hard for all of us to get together in person to get anything done.
Any advice would be greatly greatly appreciated. Plz help
Trying to transfer ownership of a 529 account – impossible to get a medallion stamp??
byu/tgoodri inpersonalfinance
Posted by tgoodri
6 Comments
Medallions are hard to get because the institution is now assuming liability for any shenanigans, it’s not as simple as a Notary stamp which is only checking ID, not assigning liability.
The obvious answer is to open an account somewhere that will do it, and wait until 6mo when they’ll do it for you. Fidelity and Schwab have branches in multiple states and are good institutions, you can call their branches and see if they would do your medallion if you had accounts
Or else forget about it.
Can they just not give you the password/login to the 529 website, and y’all just make the payments directly from there yourself? I realize their names would still be on the files, but it seems like you did all the website work that would be the main “hard” part you’d save them from doing?
I have no idea if this will work for your situation, but it may be worth investigating: https://esignatureguarantee.com
So, to truly get it moved over, the “easiest” would probably be setting up an account and waiting. Avoiding that might require some out of the box thinking. For example, what about making your daughter the beneficiary and getting a limited power of attorney for your wife over just the account allowing her to make decisions. It could be narrowly tailored to just the one account. While you’re at it, have the in-laws make sure their wills are updated so that the account ownership passes to your wife on their death too.
Can you a new 529 then have MIL transfer the funds into the new account
Are you planning to fill out a FAFSA, etc.? I think you have to disclose this if it’s in your name – not if it’s in grandparent’s name.