Section 529 of the Internal Revenue Code makes special tax allowances for contributions to certain types of education accounts. 529 education accounts enjoy protection from creditors and a trustee during bankruptcy, but special rules apply. Most important is the timing of the deposits. For instance, deposits made within a year prior to the bankruptcy filing are not protected at all. Deposits made between 365 days and 720 days prior to the bankruptcy filing are exempt up to $5,850 per beneficiary. Any deposit made over 720 days before filing bankruptcy is entirely exempt.
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