College Planning Trusts

College is expensive. And if you have children or grandchildren, you already know that the cost is only going up. The average undergraduate tuition for in-state students in Georgia has been rising steadily, and families across Atlanta are asking the same question: how do we plan ahead without losing control of the money? A college planning trust is one of the most powerful tools available. It gives you control over how funds are used, protects assets, and can work alongside other tax-advantaged strategies to help your family get ahead. At Slowik Estate Planning, located in Atlanta, Georgia, we help families build college funding strategies that are grounded in real Georgia law and tailored to your specific goals.

Table of Contents

• What Is a College Planning Trust?
• How Georgia Law Protects Your College Trust
• Combining a College Trust with a 529 Plan
• Tax Considerations for College Planning Trusts in Georgia
• How Slowik Estate Planning Can Help You Build a College Trust
• FAQs About College Planning Trusts in Atlanta, Georgia

What Is a College Planning Trust?

A college planning trust is a legal arrangement where one person (the settlor) transfers assets to a trustee, who then holds and manages those assets for the benefit of a named beneficiary, typically a child or grandchild. The trust document spells out exactly how and when funds can be used. You can restrict distributions to qualified education expenses only. You can set age requirements. You can even build in incentive provisions that reward academic achievement before funds are released.

Under the Revised Georgia Trust Code of 2010, codified at O.C.G.A. Title 53, Chapter 12, Georgia law governs how trusts are created and administered in this state. Under Article 2 of that code, O.C.G.A. § 53-12-20, an express trust shall be created or declared in writing and signed by the settlor or an agent for the settlor acting under a power of attorney containing express authorization. That means your college planning trust needs to be a properly drafted, signed legal document, not just a verbal agreement or a general intention.

The trust document must also meet specific requirements. The trust instrument must include an intention by the settlor to create a trust, trust property, a beneficiary who is reasonably ascertainable, a trustee, and trustee duties specified in writing or provided by law. This is why working with an experienced attorney matters. A college planning trust that is missing any of these elements can be challenged or fail entirely. The team at Slowik Estate Planning reviews every element of your trust to make sure it holds up under Georgia law.

You can structure a college planning trust as revocable or irrevocable, depending on your goals. A revocable trust gives you flexibility to change terms later. An irrevocable trust, on the other hand, offers stronger asset protection and potential tax advantages. The right choice depends on your family’s financial picture, your tax situation, and how much control you want to retain. We walk you through both options so you can make an informed decision.

How Georgia Law Protects Your College Trust

Georgia’s trust laws give you real tools to protect the assets inside a college planning trust. One of the strongest protections comes from Article 5 of the Revised Georgia Trust Code, which covers spendthrift and discretionary trusts under O.C.G.A. §§ 53-12-80 through 53-12-83. A spendthrift provision in your trust prevents a beneficiary from pledging trust assets to creditors before those assets are actually distributed. That means if your college-age child runs into debt or legal trouble, creditors generally cannot reach the trust funds before they are paid out.

This protection is especially valuable for families who want to ensure that money set aside for education is actually used for education. Without a trust, a lump sum gift to a young adult has no restrictions. That money can be spent on anything. A well-drafted college trust with a spendthrift clause keeps the funds protected and on track.

Georgia law also gives trustees broad authority to manage trust assets wisely. Under Article 16 of the Revised Georgia Trust Code, O.C.G.A. §§ 53-12-340 through 53-12-364, trustees are guided by prudent investor standards when managing trust investments. This means the trustee must invest trust assets in a way that balances risk and return, taking into account the purpose of the trust and the needs of the trust beneficiaries. For a college planning trust, that often means a conservative to moderate investment approach that preserves capital while still generating growth.

Article 13 of the Revised Georgia Trust Code, covering O.C.G.A. §§ 53-12-240 through 53-12-292, sets out the rules for trust administration. The trustee may present a certification of trust to any person other than a beneficiary in lieu of providing a copy of the trust instrument to establish the existence of the trust provisions, and that certification shall contain information including that the trust exists, the date of the trust and any amendments, the identity and address of each current trustee, and the relevant powers of the trustee. This makes it easier for trustees to work with financial institutions and schools without exposing the full contents of your trust to outside parties.

If you have questions about how Georgia law applies to your specific situation, reach out to Slowik Estate Planning. We serve families throughout Atlanta and the surrounding metro area and are happy to answer your questions.

Combining a College Trust with a 529 Plan

Many Atlanta families ask whether they should use a trust, a 529 plan, or both. The honest answer is that these tools work best together. A 529 plan offers excellent tax benefits for education savings, and a trust gives you control and legal protections that a 529 plan alone cannot provide.

Georgia’s own 529 plan is called the Path2College 529 Plan, administered by the Georgia Office of the State Treasurer. Georgia taxpayers can receive an income tax deduction for contributions to a Path2College 529 Plan account up to $4,000 per year, per beneficiary, for single filers, and up to $8,000 per year, per beneficiary, for joint filers. That is a meaningful tax break, and it should not be overlooked as part of a broader college funding strategy.

Investment earnings are 100% free from federal and Georgia state income taxes when used for qualified education expenses. And under the SECURE 2.0 Act, there is now a rollover option worth knowing about. Under Section 126 of that Act, you can rollover unused funds from a 529 account into a Roth IRA for the beneficiary, subject to rules and limitations. This means that if your child receives a scholarship or does not use all the funds, the money does not have to be wasted.

Under the One Big Beautiful Bill Act (H.R. 1, 119th Congress), Congress has expanded 529 plan benefits further. The K-12 distribution limit has been increased to $20,000 annually, and 529 funds can now be used for tuition, fees, books, supplies, and equipment related to enrollment in a recognized postsecondary credentialing program. Up to $20,000 annually can be used toward K-12 tuition per student.

A college planning trust can hold a 529 account as one of its assets. The trustee manages the account on behalf of the beneficiary, and the trust document controls when and how distributions are made. This combination gives you both the tax benefits of a 529 plan and the legal protections of a trust. It is a strategy that many Atlanta families overlook, and one that Slowik Estate Planning can help you set up correctly. An Atlanta estate planning lawyer at our firm can review your current savings plan and help you determine whether a combined strategy makes sense for your family.

Tax Considerations for College Planning Trusts in Georgia

Tax planning is a big part of any college funding strategy. When you put money into a trust for a child’s education, you need to understand the gift tax rules, the income tax rules, and how the trust structure affects your estate. Getting this right can save your family a significant amount of money over time.

Contributions to a trust for a child’s education are generally treated as gifts for federal tax purposes. Contributions to a 529 plan are treated as completed gifts for federal tax purposes, and as of 2026, contributions up to $19,000 per person per beneficiary fall within the annual gift tax exclusion. Contributions that exceed this amount may require filing a gift tax return, though they may still be sheltered by your lifetime exemption.

For irrevocable trusts, income tax treatment depends on how the trust is structured. A grantor trust, where the settlor retains certain powers, causes the trust’s income to be taxed to the grantor at individual income tax rates. A non-grantor trust is taxed as a separate entity, which can be beneficial or harmful depending on the trust’s income level and the applicable tax brackets. IRS guidance, including Rev. Rul. 2023-2, addresses how basis is treated in grantor trusts, clarifying that assets held in an irrevocable grantor trust do not receive a stepped-up basis at the grantor’s death unless those assets are included in the grantor’s gross estate under Chapter 11 of the Internal Revenue Code. This is an important planning consideration when deciding what assets to place inside a college trust.

For families with larger estates, college planning trusts can also interact with broader Estate Tax Planning in Atlanta Georgia strategies. Transferring assets to an irrevocable college trust removes those assets from your taxable estate, which can reduce estate tax exposure. If your family has international assets or beneficiaries living abroad, those planning needs become even more layered. Slowik Estate Planning also handles International Estate Planning for clients with cross-border concerns.

The trustee has a duty to keep clear records and account for all trust income and distributions. Under Article 12 of the Revised Georgia Trust Code, O.C.G.A. §§ 53-12-230 through 53-12-232, trustees must keep accurate accounts and provide information to beneficiaries as required. This is why choosing the right trustee matters as much as drafting the right document.

How Slowik Estate Planning Can Help You Build a College Trust

Planning for a child’s college education is one of the most meaningful things a parent or grandparent can do. But doing it well requires more than opening a savings account. It requires a strategy that considers Georgia trust law, federal tax rules, your family’s financial goals, and the needs of your beneficiaries over time.

At Slowik Estate Planning, we work with Atlanta families to build college planning trusts that are legally sound and practically useful. We draft trust documents that meet all requirements under the Revised Georgia Trust Code of 2010. We help you choose between revocable and irrevocable structures. We advise on how to coordinate your trust with 529 plans, wills, and other estate planning tools. And we make sure the trust administration process is clear and manageable for your chosen trustee.

We also stay current on legislative changes that affect college planning. The One Big Beautiful Bill Act and the SECURE 2.0 Act have both changed the rules around 529 plans and retirement accounts in ways that affect how families should structure their education funding. Our firm monitors these changes and updates client strategies accordingly.

Every family’s situation is different. A grandparent who wants to fund education for multiple grandchildren has different needs than a parent planning for one child. A family with a special-needs child has different considerations than a family without. We take the time to understand your goals and build a plan that reflects them.

We want to be clear: every legal matter is unique, and prior results in any case do not guarantee a similar outcome in your situation. What we can promise is that we will give your family’s plan the careful, personalized attention it deserves. If you are ready to start building a college planning trust in Atlanta, Georgia, contact Slowik Estate Planning today. We are here to help.

FAQs About College Planning Trusts in Atlanta, Georgia

What is the difference between a college planning trust and a 529 plan?

A 529 plan is a tax-advantaged savings account specifically designed for education expenses. A college planning trust is a legal document that holds and controls assets for a beneficiary’s education. The two are not mutually exclusive. A trust can actually own a 529 account, combining the tax benefits of the 529 plan with the legal protections and control that a trust provides. Georgia’s Path2College 529 Plan offers a state income tax deduction of up to $8,000 per year for joint filers, which is a benefit worth preserving inside a trust structure.

Can I set conditions on how college trust funds are used?

Yes. One of the biggest advantages of a college planning trust is the ability to set specific conditions. Under Georgia trust law, you can restrict distributions to qualified education expenses, require the beneficiary to maintain a certain GPA, or limit funds to tuition and fees only. The trust document controls these terms, and the trustee is legally obligated to follow them. This gives you far more control than a simple gift or a 529 account in the child’s name.

Does a college planning trust protect funds from creditors?

A college planning trust with a spendthrift provision provides strong protection against creditors. Under Article 5 of the Revised Georgia Trust Code, O.C.G.A. §§ 53-12-80 through 53-12-83, a spendthrift clause prevents a beneficiary from assigning trust assets to creditors before those assets are distributed. This means that if a beneficiary has debts or legal judgments against them, creditors generally cannot reach the trust funds while they remain in the trust. This protection is one of the primary reasons families choose a trust over a simple savings account.

What happens to unused college trust funds if my child does not go to college?

This depends entirely on how the trust document is written. You can draft the trust to allow distributions for other purposes if the beneficiary does not attend college, redirect funds to another beneficiary, or hold the assets until a certain age. If you also have a 529 plan inside the trust, the SECURE 2.0 Act now allows rollovers from 529 accounts into a Roth IRA for the beneficiary, subject to a 15-year holding requirement and other conditions. A well-drafted trust anticipates these scenarios and gives the trustee clear instructions for handling them.

Do I need an attorney to set up a college planning trust in Georgia?

Georgia law requires that an express trust be created in writing and signed by the settlor, and the trust document must meet specific legal requirements under O.C.G.A. § 53-12-20. While the law does not require an attorney, attempting to draft a trust without legal guidance creates real risks. A trust that is missing required elements, poorly worded, or inconsistent with Georgia law can be challenged or fail to accomplish your goals. Working with Slowik Estate Planning, located in Atlanta, Georgia, ensures that your college planning trust is properly drafted, legally valid, and built to protect your family’s future.

More Resources About Trusts for Children and Young Adults

• Trusts for Minor Children
• Staggered Distributions vs Lifetime Trusts for Children
• Incentive Trusts
• Trustee Instructions Values Letters and Guardrails