coverdell to coverdell in the same household
we have a coverdell account holder who is 17 yrs old. Mother wants to give the assets to the sister who is 20 yrs of age and open a coverdell acct for the 20 yr old to move the assets into.
is that possible?
what are the laws on that?
Permalink Submitted by Alan Spross on Thu, 2011-02-24 01:09
The mother cannot transfer the beneficiary, but the current 17 year old can. He can transfer the account to his sister (under age 30) by either rolling the account over to a new ESA with sister as beneficiary or just changing the beneficiary on the current ESA to the sister. Both a rollover or beneficiary transfer are non reportable transactions, but the account DOES have a one rollover limitation within 12 months like an IRA. (Ref Pub 970, p 48).