Coverdell Education Savings Account (ESA) Explained

A Coverdell Education Savings Account (ESA) is a government-established trust account designed to help families save for educational expenses of beneficiaries under 18. Coverdell funds can cover a range of expenses for eligible schools, but must be used by age 30 to avoid penalties. Unlike 529 plans, Coverdell funds can be used for elementary and secondary school costs. This article explores the key features, contribution limits, tax implications, and differences between ESAs and 529 plans.