Designating a Beneficiary

Can the Beneficiary Be Changed?

The account owner may change the beneficiary at any time without adverse federal income tax consequences if the new beneficiary is a member of the current beneficiary’s family by completing the appropriate form. The portfolios in which the account is invested can also be changed when the beneficiary is changed. If the new beneficiary is not a member of the current beneficiary’s family, then the change is treated as a nonqualified withdrawal that is subject to taxes and a penalty as described in Section 529 of the Internal Revenue Code.

As described in Section 529 of the Internal Revenue Code, a member of the family is anyone who is related to the beneficiary in one of the following ways:

Son or daughter, or a descendant of either
Stepson or stepdaughter
Brother, sister, stepbrother, or stepsister
Father or mother, or an ancestor of either
Stepfather or stepmother
Son or daughter of a brother or sister
Brother or sister of the father or mother
Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law
Spouse of the beneficiary or the spouse of any of the foregoing individuals
First cousin

If the source of contributions to an account was a State UGMA or UTMA, the beneficiary of the account may not be changed until the minor attains the legal age necessary to control the UGMA or UTMA assets.

If the beneficiary of the account is changed, the program manager will ask for certification of the relationship between the new beneficiary and the current beneficiary.

Investment Products: Not FDIC Insured. No Bank Guarantee. May Lose Value

The Bright Directions College Savings Program is part of the Illinois College Savings Pool and is designed to qualify as a qualified tuition program under the provisions of Section 529 of the Internal Revenue Code. The Bright Directions College Savings Program is sponsored by the State of Illinois and administered by the Illinois State Treasurer, as Trustee. Union Bank & Trust Company serves as Program Manager, and Northern Trust Securities, Inc. acts as Distributor.

You should be aware that other states may sponsor their own qualified tuition plans and may offer a state tax deduction or other benefits that are limited to residents who invest in that plan. You should consult with a tax advisor about state and local taxes.

Withdrawals used to pay for qualified higher education expenses are income TAX-FREE (Federal and State of Illinois). Qualified higher education expenses include tuition, fees, books, supplies and equipment required for enrollment at a qualified institution of higher education. Room and board is considered a qualified higher education expense if the student is enrolled on at least a half time basis.

Every individual's tax situation is different, and it is important to consult a qualified tax advisor regarding the application of the Program’s benefits to your own individual situation.

There is no guarantee that any investment portfolio will achieve its investment goals. The value of an account will go up or down based on the performance of the Portfolio in which the account is invested. When funds are withdrawn, they may have more or less than the total contributions made to the account. Past investment performance is no guarantee of future results.

Investments in the Bright Directions College Savings Program are not guaranteed or insured by the State of Illinois, the Illinois State Treasurer, Union Bank & Trust Company, Northern Trust Securities, Inc., the Federal Deposit Insurance Corporation or any other entity. Investors should read carefully and consider the investment objectives, risks, fees, and expenses contained in the Program Disclosure Statement (issuer's official statement) before investing. The Program Disclosure Statement, which contains additional information about the plan and municipal fund securities, is available from your financial advisor.