Should I name more than one successor owner?

You are required to name at least your primary and contingent successor owner. This will ensure that the funds in the account are used to pay the beneficiary’s higher education expenses. We recommend that one successor owner be at least one generation younger. The contingent successor could be the beneficiary or one of the parents of the beneficiary or someone else you trust to manage the account.

Having two successor owners reduces the risk to the account. For instance, if the account owner names his/her spouse as the primary successor owner and both die in a motor vehicle accident, the account would be transferred to the contingent successor owner. Otherwise, the account would be transferred to the estate of the deceased account owner and possibly none of the money in the account could be used by the beneficiary. Also, if the funds are withdrawn from the account and not used for qualified higher education expenses, the earnings enhancement and the interest thereon would be lost and there would be tax penalties.

Another possibility is that the primary successor becomes mentally incapable of handling the account. If this were to happen, the contingent successor could manage the account.

Account owners can add additional successor account owners online at www.startsaving.la.gov or by calling LOSFA at 1-800-259-5626 Ext. 1012.