Certified Financial Planner (CFP) Exam 2026 – 400 Free Practice Questions to Pass the Exam

The statement that accurately describes a Coverdell Education Savings Account is that there is no limit to the number of accounts a beneficiary can have. A Coverdell ESA allows for multiple accounts to be established for a single beneficiary, which can be beneficial for families who wish to save for education expenses through different accounts or sources. Each account can be funded by various individuals or sources, allowing for increased flexibility in saving and contributing towards a child’s education.

This feature distinguishes the Coverdell ESA from other education savings plans which may have restrictions on the number of accounts a beneficiary can hold. The lack of a cap on the number of accounts enables families to strategize their savings and might facilitate better financial planning for educational expenses.

While it is also true that there are contribution limits on the total amount that can be funded in a Coverdell ESA per year, these limits apply to individual contributions rather than limiting the number of accounts. Therefore, families can choose to have multiple accounts as long as the contributions to each adhere to the annual limit established by the IRS.