What Happens to Unused Funds. Unlike a Coverdell ESA, there are no time limits on when you have to withdraw money from a 529 plan.

Coverdell Education Savings Accounts offer tax incentives to save for future costs of school. This individual would also have until age 30 to use the funds for qualified education expenses. However, the tax benefits can last much longer and even be passed down to younger family members if you don't end up needing the money for school. Unused funds can be rolled over into a Coverdell for another eligible family member of the beneficiary or it may be maintained by changing the designated beneficiary. However, candidates sometimes have unused campaign funds, and there are a ton of laws about what they can and cannot do with the money.
This benefit applies not only to qualified higher education expenses, but also to qualified elementary and secondary education expenses. You can contribute to the account as long as the beneficiary is under 18 years old. If there’s no immediate need for the unused funds, you can just let them sit until your kids have children of their own. So you may be wondering, what happens to unused campaign funds after a candidate drops out of the race? You’d need to designate yourself as the beneficiary, but you could always switch it over to a grandchild down the road.

Coverdell Education Savings Accounts are tax-advantaged trust arrangements used to pay for qualified education costs. A Coverdell education savings account (Coverdell ESA) is a trust or custodial account set up in the United States solely for paying qualified education expenses for the designated beneficiary of the account. Contributions to an ESA can be made by anyone who meets Internal Revenue Service income requirements until the beneficiary is age 18, as long as the total of all contributions doesn’t exceed $2,000 in a year.
The truth is, more often than not there's nothing left to worry about. Coverdell individual retirement accounts, passed into law in 1997, were renamed Coverdell education savings accounts in 2002 because they had nothing to do with saving for retirement. If the beneficiary attends a lower-cost college or decides against going to college, the unused funds must be distributed to them within 30 days after they turn 30 or the funds must be transferred into another Coverdell ESA for someone who is less than 30 years of age. Another key difference between a Coverdell ESA and a 529 plan is that a Coverdell ESA operates more like a custodial account, where the funds are the property of …

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