| (a) The purchaser of a prepaid tuition contract may designate a different beneficiary in place of the original beneficiary subject to the following conditions: (1) the new beneficiary must meet the requirements of a beneficiary under §7.127 of this title (relating to Purchaser; Beneficiary), on the date the designation is changed; (2) the new beneficiary must meet the requirements of Internal Revenue Code, §529 (such as being a member of the family of the former beneficiary, as defined by §529(e)(2)), to prevent the change of beneficiary from being treated as a distribution under that law; (3) documentation must be submitted evidencing the relationship between the replacement beneficiary and the former beneficiary; and (4) the terms of the contract may be adjusted so that the purchaser is required to pay the amount the purchaser would have been required to pay had the purchaser originally designated the new beneficiary as the beneficiary, taking into account any payments made before the date the designation is changed. (b) Amounts paid before the beneficiary is changed shall be credited against amounts due at the time of the change. If the amount due at the time of the change is less than the amount paid prior to the change, such amount shall be credited against other amounts due through the term of the contract. If the amount paid prior to the change exceeds the amounts due through the term of the contract, the amount in excess of the amounts due shall be refunded to the purchaser. (c) A purchaser must submit a properly signed request form approved by the board to change a beneficiary. (d) A fee will not be imposed in connection with the designation of a new beneficiary under this subchapter. (e) The purchaser of a prepaid tuition contract may not sell the contract. |
