I opened an educational IRA for my son who never used it. My son is now 24 years old. What can be done with this fund?

ANSWER

The BIDaWIZ Team's Answer:

The Coverdell ESA (Education IRA) must be used for educational expenses or the earnings will be taxable and there's a 10% penalty for not using it for educational purposes. Exceptions to the additional 10% tax include the death or disability of the beneficiary or if the beneficiary receives a qualified scholarship. Having said that, does the client have another child that is younger? If so, the funds can be rolled into another Coverdell ESA account tax-free for the benefit of that child.