Kids school savings

[MKS]

The in-laws set up Coverdell Educational savings accounts for each of our kids. This can only be spent for "approved" educational expenses. Would this be an automatic exemption or would we have to use a blanket exemption for it?

Thinking of filing soon on $100K+ CC debt. Thanks to the drop in home values we will be able to exempt the house, the two cars fit under the standard exemption and cash will be gone when we file. These accounts are the only other things we really care about.

Any thoughts would be appreciated!

[PdxDavid]

I found this :

Education Funds exempt from seizure:

Funds placed in an educational retirement account or qualified State tuition programs at least 365 days prior to a bankruptcy filing, within the limits established by the Internal Revenue Code, and for the benefit of a child or grandchild of the debtor, are excluded from the debtor's estate, with a $5,000 limit on funds contributed between one and two years before the filing.

Here... http://www.bankruptcyaction.com/waexemptions.htm

[music12]

actually, i think it's totally exempt no matter how long ago money was put in there, because it was not put in there by you but by someone else (the in-laws). it's not money you are holding and it's not money in your name. you can't use this money at all. so it's not your asset. i don't think there is any place in the petition to report an asset that you don't have and is not yours.

[MKS]

Re: Kids school savings

The trick is it is in my wifes name as controlling, as an adult has to have control of the account and the in-laws wanted one of us to be on it. That said, we can't spend it on us just the kids, and only for education.

[music12]

then you'd report it as money you are holding for another. it won't be considered your asset.