When must the assets in a Coverdell ESA be used by the beneficiary?

The assets in a Coverdell Education Savings Account (ESA) must be used by the beneficiary by age 30. This means that if the funds are not used for qualified education expenses by that age, they must be distributed, and any earnings that are not used for educational purposes may be subject to taxes and penalties. This provision encourages the timely use of the education savings for the intended purposes, such as paying for college tuition, books, or other qualified educational expenses.

The option stating that assets must be used by age 25 is incorrect, as the actual age limit is 30. The age of 18 is also not applicable, as it is younger than the set age limit for utilizing the assets. Lastly, while the option suggests there are no restrictions on using the funds as long as contributions are made until age 18, this misunderstands the requirement. The main stipulation is still the age limit for using the funds, which is not indefinite.