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Grandparent 529 dilemma
Old 09-04-2015, 10:02 AM   #1
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Grandparent 529 dilemma

We established Washington State GET 529 accounts for three grandchildren shortly after their birth, the eldest is 8. The program has offered participants the opportunity to cash out at the current value of the units so we are considering that option.

If we did that we could transfer the $ for one grandchild to the 529 investment account controlled by her parents. We do not expect she will need financial assistance to pay for college.

The dilemma is what to do for the other two (siblings) who are 5 and 7. Both exhibit the smarts to make it to college but one never knows what the future will hold. They will likely apply for scholarships, loans or grants to help pay for college. Are there any risks or advantages to establishing one account with both their names on it?

We now live in Oregon as do the two grandchildren discussed above so if we close the GET account we cannot re-open it.

Thoughts folks?
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Old 09-04-2015, 11:06 AM   #2
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This site might answer some of your questions:

Grandparents Faqs on 529s - College Savings for Grandchildren

I was going to quote some of the info from the site, but there is so much good info there that you probably want to go read it all yourself. It will be worth your time.
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Old 09-04-2015, 11:15 AM   #3
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Based on this:
http://www.get.wa.gov/sites/default/...09-02-2015.pdf

you can transfer the funds from the GET (pre-paid tuition plan) directly into another 529 plan. A good place to search for plans is The Internet Guide to Funding College and Section 529 College Savings Plans. Savingforcollege.com

Though we've lived in Alabama and currently in PA, my boys' 529 plans are with Utah.
Most plans allow a grandparent to contribute even though the account owner may be the parent, but you'd give up any control as to the disposition of funds if the child does not go to college.
I'd just transfer all three to another 529 plan to maintain control and ownership.
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Old 09-04-2015, 12:19 PM   #4
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I think we want to control the 529 for the set of siblings. The question for us would be who should 'own' it if we pass before they enter college. The other question is a joint or single beneficiary account. I am inclined to a joint account to cover the possibility that one doesn't go to college.

The other grandchild has CPA parents who will be here for dinner tonight. Maybe I should run these questions up their flagpole.
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Old 09-04-2015, 12:35 PM   #5
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I guess I am a little confused by your question and the options you propose. The Wash GET 529 plan is a prepaid plan that is frozen right now. I think I would roll everything out of the Wash plan into more flexible 529s and keep control of all the assets my self. I see no advantage to giving to parents.
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Old 09-04-2015, 01:01 PM   #6
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Successor account owner: Top Tips 529 Plans

I've never seen an 529 account with more than one beneficiary but that doesn't mean it is not possible. I do know that the Utah plans I have do not allow more than one beneficiary at a time. However, the account owner can change beneficiaries to another related person if the first does not go to college or use up all the funds.
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Old 09-04-2015, 01:20 PM   #7
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I used 529's to send my two children to college, one just finished debt free with less than $100 remaining in his 529. The other should in two years, she'll likely have more money remaining since she earned some scholarship assistance. For us 529's worked great.

My only comment would be to keep contributions to the three grandchildren equal, regardless of what their college plans are and what their actual expenses may be. I told my children that any money remaining in their respective 529 plans is theirs to keep, so any scholarship money they qualify for or work-study assistance is actually going to result in money in their pocket. I didn't want to "penalize" one if they tried to save some money on their education expense. Our contribution to their education was equal to the dollar.

Good deeds can often create hard feelings if all aren't treated equally.
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Old 09-04-2015, 01:59 PM   #8
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I do not know how much money is in your plans, but I have not heard of anybody not have to cough up money to go to college no matter how many scholarships they get...

Now, if they do not go, that is a different question....
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Old 09-05-2015, 12:08 PM   #9
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Quote:
Originally Posted by RE2Boys View Post
I've never seen an 529 account with more than one beneficiary but that doesn't mean it is not possible. I do know that the Utah plans I have do not allow more than one beneficiary at a time. However, the account owner can change beneficiaries to another related person if the first does not go to college or use up all the funds.
We have our 529s in the New York State plan (currently managed by vanguard, so relatively low fees and good index-based investing options). I am the owner of the account and our two kids are the beneficiaries. I can move money within their individual sub-accounts or between the sub-accounts. Might be a good option for an account with multiple grandchildren.
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Old 09-05-2015, 12:20 PM   #10
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529 money is held in your name, and you can switch the recipient of the money willy-nilly, as long as it's a family member.

So you would create two accounts, and fund both accounts to the level of one single college education. If only Kid A went to college, you'd simply replace the beneficiary name on the other account, switching it from Kid B to Kid A. Now Kid A has both accounts and will have enough to cover 100% of their college. If both happened to go to college, you'd leave the beneficiaries alone, and each would have 50% of their college education paid for.
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Old 09-07-2015, 07:19 PM   #11
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Just something I observed today....

While driving home from the lake today we passed a boat...

The name "Kids Education Fund"....

So, there is always that...
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Old 09-08-2015, 12:10 PM   #12
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You have no idea how close that hit home!!

The sibling's parents own a boatyard!!!
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