Using 529s Overseas?
Jennifer says her father recently passed away and left each of her kids $5,000 for college. Could the money be used for schools outside of the U.S. if it's placed in 529 accounts?
QUESTION: Jennifer in Buffalo says her father recently passed away and left each of her kids $5,000 for college. Could the money be used for schools outside of the U.S. if it’s placed in 529 accounts?
ANSWER: I don’t know. You’d have to check with someone who sells 529s to find out if the money will still not be taxed when you use it in another country. I’m not aware of it having a limitation, but that doesn’t mean it’s not there, so what I would tell you to do on that is go to daveramsey.com and click on Endorsed Local Provider (ELP) on the right side of the website for investing. That’s who we recommend people go to to set up their 529s. If you’re using someone else, talk to your person that you’re using. They should be able to tell you. If they’re not, then these guys can help you not only set it up, but they can also teach you about it and you can get that question answered in the right way. They’ll tell you whether you want to do a 529 or whether you want to explain to the kids, “We’re doing a 529, which means you’re going to a U.S. school because that’s what the guidelines say.”
If you need to limit it, go ahead and know ahead of time that you’re doing that. That just keeps everyone’s expectations in the right place.