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New beneficiary for excess 529 money
01-17-2022, 02:32 PM
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#1
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Full time employment: Posting here.
Join Date: Dec 2004
Posts: 698
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New beneficiary for excess 529 money
So if someone over contributes to a grandchild's 529, it looks like unused money can be moved to another grandchild (including cousin of grandchild).
Do you think it could be changed to great grandchild as beneficiary ? Assume it would have to be a "blood" relative of grandparent - but maybe not ?
Seems pretty flexible. Worst case would be paying tax on earning plus additional 10% federal tax.
https://www.merrilledge.com/ask/coll...n%2C%20perhaps.
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01-17-2022, 03:00 PM
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#2
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Thinks s/he gets paid by the post
Join Date: May 2007
Posts: 1,456
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One of my granddaughters got a full scholarship so I was able to move her funds to her sisters.
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01-17-2022, 04:28 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Oct 2015
Posts: 2,229
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Yes, you should be able to transfer to great grandchild. The IRS definition of "family" for this particular purpose is quite loose.
https://www.savingforcollege.com/art...an-beneficiary
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New beneficiary for excess 529 money
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01-17-2022, 05:46 PM
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#4
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2013
Location: Limerick
Posts: 5,478
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New beneficiary for excess 529 money
We recently opened two accounts for our great nephew and niece who lost their father. When we’re gone, our niece will take charge of it and if the intended beneficiaries don’t use it, we’ve told her to change beneficiaries to other family members.
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01-17-2022, 05:56 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Coronado
Posts: 3,492
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Yes, you can transfer from a grandchild to a great-grandchild. You would be subject to the generation skipping tax but would only owe money if you've used up the $11M+ combined gift/gst exemption.
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01-18-2022, 04:47 AM
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#6
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Full time employment: Posting here.
Join Date: Dec 2004
Posts: 698
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Excellent - thanks everyone !!
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01-18-2022, 04:06 PM
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#7
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Recycles dryer sheets
Join Date: May 2010
Posts: 493
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I started 529's for grandchildren before they were even thought of. I temporarily put the 529's in my children's names. I switched when they got married and had babies. Plan is/was one large 529 for each of my children and they can switch between each grandchild.
__________________
You've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?
Retired July '11 investments in very low cost index and mutual funds, balance once a year at best.
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01-20-2022, 09:07 AM
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#8
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Moderator
Join Date: Oct 2010
Posts: 10,293
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When you say "they can switch" do you mean your kids will tell you how to allocate between your grandchildren? Presumably you would continue to hold the 529 account, and be in control of beneficiary designation.
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01-20-2022, 09:23 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2015
Posts: 2,229
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 Quote:
Originally Posted by sengsational
When you say "they can switch" do you mean your kids will tell you how to allocate between your grandchildren? Presumably you would continue to hold the 529 account, and be in control of beneficiary designation.
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529s typically have successor provisions, so you can basically move "ownership on death". I assumed that was the case here?
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01-20-2022, 01:11 PM
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#10
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Recycles dryer sheets
Join Date: May 2010
Posts: 493
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Quote:
Originally Posted by sengsational
When you say "they can switch" do you mean your kids will tell you how to allocate between your grandchildren? Presumably you would continue to hold the 529 account, and be in control of beneficiary designation.
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When I switched I made each of my children the controllers and their first child the beneficiary . I am completely out of it. Now I'm taking my vitamins to hopefully go to the graduations some day. hehe
__________________
You've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?
Retired July '11 investments in very low cost index and mutual funds, balance once a year at best.
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01-20-2022, 03:44 PM
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#11
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Moderator
Join Date: Oct 2010
Posts: 10,293
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Quote:
Originally Posted by ducky911
When I switched I made each of my children the controllers and their first child the beneficiary . ...
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Nice. No grandchildren for me yet. I'll probably run with your idea. I could do it now, before grandchildren, I suppose, making my child the controller and the beneficiary, or put it in the 'now that I'm gone' instructions as what I want to happen if grandchildren ever show up.
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01-21-2022, 10:06 AM
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#12
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Recycles dryer sheets
Join Date: May 2010
Posts: 493
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Quote:
Originally Posted by sengsational
Nice. No grandchildren for me yet. I'll probably run with your idea. I could do it now, before grandchildren, I suppose, making my child the controller and the beneficiary, or put it in the 'now that I'm gone' instructions as what I want to happen if grandchildren ever show up.
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I was the controller until I made the switch. I never let on to them that the accounts existed. This worked for me and I contributed to them for several years...including 2009...so they did very well.
__________________
You've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?
Retired July '11 investments in very low cost index and mutual funds, balance once a year at best.
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01-21-2022, 10:44 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Oct 2015
Posts: 2,229
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Quote:
Originally Posted by ducky911
I was the controller until I made the switch. I never let on to them that the accounts existed. This worked for me and I contributed to them for several years...including 2009...so they did very well.
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I'm just curious: how did you mange to keep the account secret? I was just involved in setting up a 529 for my MILs grandchild and we needed to get the beneficiary's social security number. So, my MIL had to ask her son for her grandchild's SS and the cat was out of the bag.
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01-21-2022, 01:32 PM
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#14
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Recycles dryer sheets
Join Date: May 2010
Posts: 493
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Quote:
Originally Posted by euro
I'm just curious: how did you mange to keep the account secret? I was just involved in setting up a 529 for my MILs grandchild and we needed to get the beneficiary's social security number. So, my MIL had to ask her son for her grandchild's SS and the cat was out of the bag.
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Grandkid where not born yet.
All I needed were my children SSN(I had them). Years later after babies came I asked for grandchild's SSN, just short of turning it over to them.
529 program is amazing I thought make it better by adding years to the typical 18
I have pondered doing it for great grand children.
__________________
You've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?
Retired July '11 investments in very low cost index and mutual funds, balance once a year at best.
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01-21-2022, 02:28 PM
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#15
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Recycles dryer sheets
Join Date: Feb 2014
Posts: 275
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What age were your kids when you transferred the 529?
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