rk911
Thinks s/he gets paid by the post
We’re considering opening a 529 plan for our friend’s
child and we ‘d like it to be a surprise. How do we/can this be done?
child and we ‘d like it to be a surprise. How do we/can this be done?
Gift a 529 Plan
- Thread starter rk911
- Start date
When do you want it to be a surprise? Now? Or when they go to college? I believe the little kids in our family, all of whom have a 529, have their names and social security numbers as part of the account info. I think that was required. They don’t get the statements necessarily; those go to the adult who is in charge of the account. In two instances in our family, that adult is a grandparent. In another two, it is the parent.
One thing that I wish we knew earlier is that how the money in the 529 is counted against projected financial need is different depending on who the adult is. I believe the best arrangement from that perspective is having the adult be a parent, not someone who is not the parent. So the two family kiddos whose 529’s are grandparent-overseen are likely to be expected to pay more for their education as a percentage of the estimated education cost because the treatment is different. That means they may qualify for less in the way of guaranteed student loans or financial aid. (So do check that out yourself.)
One thing that I wish we knew earlier is that how the money in the 529 is counted against projected financial need is different depending on who the adult is. I believe the best arrangement from that perspective is having the adult be a parent, not someone who is not the parent. So the two family kiddos whose 529’s are grandparent-overseen are likely to be expected to pay more for their education as a percentage of the estimated education cost because the treatment is different. That means they may qualify for less in the way of guaranteed student loans or financial aid. (So do check that out yourself.)
OP
OP
rk911
Thinks s/he gets paid by the post
The child is not a blood relative and I’m thinking to provide the surprise gift now.
calmloki
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
We contribute to a friend's kid's 529 in Oregon. It is now a hassle to do so, gotta be parent or some close blood relative to control where the money goes fund-wise. Otherwise you have to get the fund numbers from the controlling adult. 529 seems to want one to send the money to the controlling adult and THEY can make the deposit. Irksome now vs. 5 years ago.
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You can open an account with yourself as both the owner and beneficiary and fund it. When you want to give the account to the child, you submit a change of beneficiary form with the child's name and SSN. You would still own the account and would manage the withdrawals. If you no longer want to own the account, you can probably transfer it to the child's parent, but you should verify that with whichever state plan you're going to use before you open the account.
Also some states have plans that don't require residency. We used the Alaska plan even though we didn't live there because it had better investment options and there was no tax deduction for using our own state's plan.
This looks like a way to eliminate the possibility of the parent liquidating the account and not using it for college expenses. Not an accusation or likelihood, but a potential outcome OP can't control.
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