Formerly known as an Education IRA, a trust or custodial account established to pay qualified education expenses for the designated beneficiary of the account. Contributions to a Coverdell Education Savings Account (Coverdell) are not tax-deductible. Withdrawals can be made from a Coverdell tax and penalty-free for an educational expense as soon as the account is opened. Once the designated beneficiary turns 18, contributions are no longer accepted into the account. The student must then withdraw all of the money from the account within 30 days after his 30th birthday or is subject to a tax penalty (IRC § 530).