Gain Much Needed Asset Protection for Education

InvestmentNews

If you're a physician-parent who's savingfor Junior's higher education, there's somethingto cheer about. It turns out that thenew bankruptcy law signed by PresidentBush this past April protects the assets in529 college savings plans and Coverdelleducation savings accounts. Because doctorswork in a world where the threat ofmalpractice seems to be lurking aroundevery corner, John Heywood, principal ofThe Vanguard Group Inc, recently toldthat "this is somethingthat is meaningful to them." Of course,there are some basic rules that you need toknow. The Bankruptcy Abuse Preventionand Consumer Protection Act of 2005 onlyfully protects college savings accounts thatwere created at least 2 years before a bankruptcyfiling. Accounts that are less than 1year old will not be protected from creditors.However, assets that were contributedto an account 1 to 2 years before a filing areprotected for up to $5000.