New beneficiary for excess 529 money

[Delawaredave5]

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/col...from a 529 account,or a first cousin, perhaps.

 

[homestead]

One of my granddaughters got a full scholarship so I was able to move her funds to her sisters.

 

[euro]

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/article/who-is-a-member-of-the-family-of-a-529-plan-beneficiary

 

[Dash man]

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.

 

[cathy63]

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.

 

[Delawaredave5]

Excellent - thanks everyone !!

 

[ducky911]

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.

 

[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.

 

[euro]

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.

529s typically have successor provisions, so you can basically move "ownership on death". I assumed that was the case here?

 

[ducky911]

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.

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

 

[sengsational]

When I switched I made each of my children the controllers and their first child the beneficiary . ...

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.

 

[ducky911]

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.

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.

 

[euro]

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.

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.

 

[ducky911]

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.

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.

 

[livingalmostlarge]

What age were your kids when you transferred the 529?