The use of individual, joint, or trust accounts can be a useful tool in funding college expenses. In these cases, funds are not allocated to accounts that are designed specifically for secondary or higher education. Rather, they are used in non-qualified accounts titled in the name of the parent/parents or family trust. Though these accounts lack the tax benefits of their more specifically-focused peers, there are benefits. Should the beneficial child not go to college, the funds in these accounts can still be used for other financial expenditures without tax penalty. Things like: purchasing or upgrading a home, starting a business, paying for a wedding, etc. The funds stay in control of the parent or adult family member, giving them options should the planning needs of their family change.
The negative in using this planning tool specifically for college is that these accounts do not have the favorable tax treatment that other college planning accounts enjoy which is a tradeoff that should be explored. In many cases a plan that utilizes both tax-preferential accounts such as 529s, Coverdells or UTMAs, along-side individually or jointly titled assets, can be a beneficial way to do college planning.
For more information how to balance your college savings plans and priorities, consult a Trilogy Advisor.