{"data":{"id":"us-ky/krs-164a.707","jurisdiction":"us-ky","citation":"KRS 164A.707","heading":"Prepaid tuition contracts -- Amendments -- Accounts not subject to","body":"creditors or taxes -- No guarantee of attendance at institution -- Payment of\ncontracts -- Beneficiaries -- Investments and earnings -- Contracts not\nsecurities or annuities -- Contracts subject to amendment by subsequent\nchange to statute, regulation, or policy.\n(1) Purchasers buying prepaid tuition for a qualified beneficiary shall enter into prepaid\ntuition contracts with the board. These contracts shall be in a form as shall  be\ndetermined by the office. The contract shall provide for the purchase of a tuition\nplan for prepaid tuition for the qualified beneficiary from one (1) to five (5) specific\nacademic years.\n(2) Upon written notification to the office a purchaser may amen d the prepaid tuition\ncontract to change:\n(a) The qualified beneficiary, in accordance with 26 U.S.C. sec. 529;\n(b) The projected college entrance year for which prepaid tuition is purchased.\nBeginning July 15, 2014, if the amendment extends the projected college\nentrance year, the utilization period shall begin with the initial projected\ncollege entrance year;\n(c) A tuition plan designation to another tuition plan designation;\n(d) The number of years for which prepaid tuition is purchased; or\n(e) Other provisions of the prepaid tuition contract as permitted by the board.\n(3) A prepaid tuition account shall not be subject to attachment, levy, or execution by\nany creditor of a purchaser or qualified beneficiary. Prepaid tuition accounts shall be\nexempt from a ll state and local taxes including, but not limited to, intangible\npersonal property tax levied under KRS 132.020, individual income tax levied\nunder KRS 141.020, and the inheritance tax levied under KRS Chapter 140.\nPayments from a prepaid tuition account  used to pay qualified postsecondary\neducation expenses, or disbursed due to the death or disability of the beneficiary, or\nreceipt of a scholarship by the beneficiary shall be exempt from tax liabilities.\n(4) Nothing in KRS 164A.700 to 164A.709 or in a pr epaid tuition contract shall be\nconstrued as a promise or guarantee that a qualified beneficiary shall be admitted to\nan eligible educational institution, be allowed to continue to attend an eligible\neducational institution after having been admitted, or b e graduated from an eligible\neducational institution.\n(5) Prepaid tuition contract payments shall not be made in real or personal property\nother than cash and shall not exceed the prepaid tuition. Prepaid tuition contract\npayments may be made in a lump sum or installments.\n(6) The purchaser shall designate the qualified beneficiary at the time the purchaser\nenters into a prepaid tuition contract, except for a prepaid tuition contract purchased\nin accordance with KRS 164A.700(13)(d). In the case of gifts mad e to the fund, the\nboard shall designate a qualified beneficiary at the time of the gift.\n(7) The prepaid tuition contract shall provide that the purchaser and the qualified\nbeneficiary shall not directly or indirectly or otherwise control the investment of the\nprepaid tuition account or earnings on the account. Payments made for prepaid\ntuition shall be accounted for separately for each qualified beneficiary. No interest\nor earnings on a prepaid tuition contract of the purchaser or qualified beneficiary\nshall be pledged or otherwise encumbered as security of a debt.\n(8) A prepaid tuition contract does not constitute a security as defined in KRS 292.310\nor an annuity as defined in KRS 304.5-030.\n(9) Each prepaid tuition contract is subject to, and shall inco rporate by reference, all\noperating procedures and policies adopted by the board, the statutes governing\nprepaid tuition contracts in KRS 164A.700 to 164A.709, and administrative\nregulations promulgated thereunder. Any amendments to statutes, administrativ e\nregulations, and operating procedures and policies shall automatically amend\nprepaid tuition contracts, with retroactive or prospective effect, as applicable.","path":["KRS Chapter 164A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=48186","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:19Z","sha256":"d3360c73def3e135433a2edf37d72cb62e592700579c33e2280b6cda60becb9c","source_id":"us-ky","stale":false,"prev":"us-ky/krs-164a.705","next":"us-ky/krs-164a.708"},"notice":"GroundRules: Original legal text. Not legal advice."}