SECTION 7.63. Change of Beneficiary

(a) The purchaser of a prepaid tuition contract may substitute one beneficiary for another subject to the following conditions:

(1) the new beneficiary must meet the requirements of a qualified beneficiary on the date the designation is changed, including residency requirements;

(2) the new beneficiary is a member of the family of the original beneficiary who meets the requirements of the Internal Revenue Code of 1986, §529 so that the change of beneficiary is not treated as a distribution under that law;

(3) documentation must be submitted evidencing the relationship of the beneficiaries;

(4) the purchaser must pay any amounts that would have been paid under the contract originally had the new beneficiary been designated at the time the original beneficiary was designated, plus any required fees specified in the board's fee schedule; and

(5) the original beneficiary has not used any contract benefits.

(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 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.

Source Note: The provisions of this §7.63 adopted to be effective January 8, 1996, 20 TexReg 11124; amended to be effective November 15, 1996, 21 TexReg 10888; amended to be effective December 3, 1997, 22 TexReg 11716; amended to be effective July 14, 2002, 27 TexReg 6041