Morgan Stanley offers a variety of 529 plan options to help you save for college and other education expenses, while taking advantage of tax and estate planning benefits.
Offered to Morgan Stanley clients nationwide, this plan is integrated into your goals-based advisory relationship
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Tailored to your needs, these 529 plans are offered through some of the nation’s leading mutual fund companies
Learn More529 plans are flexible, tax-advantaged investment accounts with benefits beyond positioning you to pay for college. They offer tax-free growth and withdrawal potential,2 a high degree of versatility and control for the account owner, and potentially significant estate tax and other benefits.
Once you fund a 529 account, any growth of that money is generally income tax-free. And it can normally be distributed income tax-free if it’s used to pay for qualified education expenses, including tuition and supplies2
Help pay for private K-12 education, graduate school, semesters abroad, apprenticeship programs and student loans.2 Stay in full ownership of your account even as you change beneficiaries or withdraw funds3
Because contributions to a 529 plan are generally excluded from a donor’s gross estate calculation,4 you can typically move money from your taxable estate to beneficiaries estate tax-free, without ever losing control
529 plans are notable for their flexibility—with no income, age or time limits, no minimum distributions, no state residency requirements, no limits on who can benefit or contribute,5 and high contribution limits
As the first and only of its kind, the Morgan Stanley National Advisory 529 Plan offers fiduciary oversight of your education funding strategy within the context of your broader assets, portfolio and life goals for a single asset-based fee covering your entire advisory relationship¹—all powered by the vast resources of Morgan Stanley:
Gain access to Morgan Stanley’s intellectual capital, global resources and institutional-caliber managers through goals-based portfolios that align with your unique time frame, risk profile and goals
Manage your 529 account investments within a holistic advisory relationship and take advantage of integrated tax, risk management and estate planning benefits across your entire wealth strategy
Work with your Financial Advisor to select an allocation that invests for education expenses within the context of your wealth plan, while navigating market conditions and tracking progress toward your goals
We offer a variety of 529 plan options from some of the nation’s leading mutual fund companies, backed by our own due diligence. We can provide valuable expertise to help you choose from a range of investment strategies, and tailor your account depending on the specific plan, the age of the beneficiary, your time horizon, financial objectives and risk tolerance.
A 529 account can help you pave the way for a loved one on the path to success, while both reducing the income taxes on your investments and the taxable value of your estate for federal estate tax purposes. The combination of income tax-free growth and withdrawal potential,2 estate tax benefits, attractive continuous-control features, and versatility to address circumstances as they arise make 529 plans an education investment vehicle of choice.
Your Morgan Stanley Financial Advisor or Private Wealth Advisor can help answer your questions about 529 plans and provide guidance on developing an approach to help you achieve your goals.
Additional Information: Morgan Stanley National Advisory 529 Plan Program Documents, Morgan Stanley National Advisory 529 Plan Annual Report
Footnotes
1. The North Carolina State Education Assistance Authority (the "Authority") is an instrumentality of the State of North Carolina sponsoring the Morgan Stanley National Advisory 529 Plan, and the 529 Plan is a component of the Parental Savings Trust Fund established by the General Assembly of North Carolina. Neither the Authority, the State of North Carolina nor any other affiliated public entity or any other public entity is guaranteeing the principal or earnings in any account. Contributions or accounts may lose value and nothing stated herein, the 529 Plan Description and Participation Agreement or any other account documentation shall be construed to create any obligation of the Authority, the North Carolina State Treasurer, the State of North Carolina, or any agency or instrumentality of the State of North Carolina to guarantee for the benefit of any parent, other interested party, or designated beneficiary the rate of return or other return for any contribution to the Parental Savings Trust Fund and the 529 Plan.
Morgan Stanley Smith Barney LLC (“Morgan Stanley”) is the manager of the 529 Plan and is responsible for its administration, distribution and investment management. Morgan Stanley does not provide tax and/or legal advice to investors in the 529 Plan. Investors should consult their personal tax advisor for tax-related matters and their attorney for legal matters. For more information please see the applicable Morgan Stanley ADV brochure at www.ms.com/adv.
The Morgan Stanley National Advisory 529 Plan is a proprietary offering available exclusively to Morgan Stanley advisory account clients. The Plan is not transferable to other intermediaries.
The annual fee, based on assets and billed monthly, covers a full range of investment services. The annual asset-based fee does not cover (1) the state administrative fee, (2) the cost of investment management fees and other expenses charged by Funds, (3) any Morgan Stanley Wealth Management account establishment, maintenance or termination fees for Plans, which are set forth in the respective Plan account and fee documentation (which may change from time to time).
2. Assets in a 529 plan potentially grow on a tax deferred basis and can generally be withdrawn federal income tax-free only if they are used to pay for qualified education expenses. Qualified expenses include tuition, fees, room and board, books and supplies at virtually any accredited post-secondary school. Effective for distributions made on or after January 1, 2018, the definition of qualified education expenses for federal income tax purposes expanded to include tuition for K-12 schools, as a result of the 2017 Tax Cuts and Jobs Act. The new tax law limits qualified 529 withdrawals for eligible K-12 tuition to $10,000 per beneficiary per year. Effective for distributions made on or after January 1, 2019, the definition of qualified higher education expenses for federal income tax purposes was expanded to include certain costs associated with qualifying apprenticeship programs and up to $10,000 (lifetime limit per individual) in amounts paid towards qualified student loans of the 529 plan designated beneficiary (or such beneficiary’s sibling). Note, however, using 529 plan distributions to repay qualified student loans may impact the deductibility of student loan interest. The state tax treatment of 529 plans (including the state tax treatment of distributions) may be different from the federal tax treatment and may vary based on the particular 529 plan in which you participate and your state of residence. If the applicable state tax law does not conform with the federal tax law, 529 plan distributions used to pay certain expenses, such as K-12 tuition expenses, principal and interest on qualified student loans and/or qualifying apprenticeship costs, may not be considered qualified expenses for state tax purposes and may result in adverse state tax consequences to the account owner or designated beneficiary. Non-qualified distributions of earnings will be subject to ordinary income tax and may be subject to a 10% federal income tax penalty. Many states allow a partial or full state income tax deduction or credit for 529 plan contributions to a 529 plan, but may limit the availability of such credit or deduction to only those contributions made to that state’s sponsored 529 plan.
3. Nonqualified distributions of earnings are subject to ordinary income tax and may be subject to a 10% penalty tax.
4. Contributions to a 529 plan are excluded from a donor’s gross estate calculation, unless you name yourself as beneficiary.
5. Beneficiaries must have a Social Security Number or Taxpayer Identification Number, and some plans may have certain limitations.
IMPORTANT DISCLOSURES
The 529 Plan Description contains more information on investment options, risk factors, fees and expenses, and potential tax consequences, which should be carefully considered before investing. Investors can obtain a 529 Plan Description from their Financial Advisor and should read it carefully before investing.
Investors should consider many factors before deciding which 529 plan is appropriate. Some of these factors include: the plan’s investment options and the historical investment performance of these options, the plan’s flexibility and features, the reputation and expertise of the plan’s investment manager, plan contribution limits and the federal and state tax benefits associated with an investment in the plan. Some states, for example, offer favorable tax treatment and other benefits to their residents only if they invest in the state’s own qualified tuition program. Investors should determine their home state’s tax treatment of 529 plans when considering whether to choose an in-state or out-of-state plan. Investors should consult with their tax or legal advisor before investing in any 529 plan or contact their state tax division for more information.
Investments in the 529 Plan are not FDIC-insured, nor are they deposits or guaranteed by a bank or any other entity, so an individual may lose money through such investments.
The Morgan Stanley Goals-Planning System (GPS) includes a brokerage investment analysis tool. While securities held in a client’s investment advisory accounts may be included in the analysis, the reports generated from the GPS Platform are not financial plans nor constitute a financial planning service. A financial plan generally seeks to address a wide spectrum of a client’s long-term financial needs, and can include recommendations about insurance, savings, tax and estate planning, and investments, taking into consideration the client’s goals and situation, including anticipated retirement or other employee benefits. Morgan Stanley Smith Barney LLC (“Morgan Stanley”) will only prepare a financial plan at a client’s specific request using Morgan Stanley approved financial planning software.
Investing in financial instruments carries with it the possibility of losses and that a focus on above-market returns exposes the portfolio to above-average risk. Performance aspirations are not guaranteed and are subject to market conditions. High volatility investments may be subject to sudden and large falls in value, and there could be a large loss on realization which could be equal to the amount invested.
IMPORTANT: The projections or other information provided by the Morgan Stanley Goals Planning System regarding the likelihood of various investment outcomes (including any assumed rates of return and income) are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Morgan Stanley does not represent or guarantee that the projected returns or income will or can be attained.
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The Morgan Stanley National Advisory 529 Plan is a nationwide plan sponsored by
