Personal Investment & Financial Planning Q`s/NY State 529 Plan


Hi John,  I have a question regarding our New York State 529 Education Plan.  My mother recently passed away and my father is looking into some financial options with some funds they have.  He is looking to contribute a lump sum of money into his 3 grandkids 529 plan.  Do you know the in's and out's of gift contributions ?  maximum yearly ? I do not want him to face any tax penalties etc with making these large sum contributions.  And how would it affect our end on claiming the contributions on our taxes ?  Would it be more beneficial to make smaller lump sums each year?  Any advice would be greatly appreciated.


Hi Becky. Under current law, am individual is allowed to gift $14,000 per year to any number of other individuals. If they make gifts in excess of this in any given year then this simply reduces the amount they can pass at their death estate tax free. In addition, if a person make a gift to another that exceeds $14,000, then they will need to file a gift tax return to record this excess gift but no tax is owed. In the case of 529 plans, law allows you to front load the plan with up to 5 years of gifts. In other words, a person can put up to $70,000 into a 529 plan in any one year, however, they are then prohibited from making gifts to that person for the next 5 years. Does this make sense? Finally, most states (if not all) impose a maximum lifetime amount that can be contributed into a 529 plan for any one individual, however, this maximum amount is in excess of $200,000 and goes to $300,000 for some. I hope this helps!

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John D Smith, CFP


I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related comprehensive wealth management and investment concerns.


I have been providing fee only investment management and comprehensive wealth management services for the past 19 years.

I have a degree in Financial Planning & Counseling and I am also a Certified Financial Planner practitioner.

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