September is College Savings Month and a bill in front of Congress would give financial advisers more flexibility to help their clients who invest in 529 college savings plans.

The current bill (HR 1351) would make permanent some changes that so far are only allowed this year. The most useful change for advisers is the ability to make two switches per year from one plan to another, or to change allocations within a plan.

Traditionally, only one such annual switch was allowed, said Joseph Hurley, founder of Savingforcollege.com. This year, two changes were allowed, and this bill is an attempt to make that a permanent change, he said.

Hurley said that advisers will view this as an aid mostly in terms of adding a level of flexibility in their service to clients.

But Hurley said that there is another way to make a switch within a plan. “Something that most financial advisers don’t realize, is that you can always just change your beneficiary, and when you do that you can also make a switch in your [529] plan,” he said.

A parent can change the beneficiary of the plan from one child to another, and use the opportunity to make the desired allocation switches, he said. The money continues to grow tax deferred. And when the first child actually needs the money for college? No problem, just change beneficiaries again, Hurley said. There is no limit on that, he added.

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