Correct, I’ve seen people want to pull out the money because it’s going to be a lot they give to their kid at 21(generally). But it’s not the custodians money so they can’t.

Not sure what you mean by count, I have 3 529's each has one kid as the beneficiary. When I do FAFSA the sum total of all 3 gets reported as an Asset. I can and have been moving money from the third kids account to pay the 2nd kids tuition as i am using the 529 to pay tuition before I take out a new mortgage. I could just reassign the beneficiary but i was doing it in chunks not all at once.


Well I would guess it would depend on relationships, I am fairly sure my Dad would have had no problem creating the account then giving me the username and password, and I would manage it from there. But yes you have to have a good relationship. In hindsite, this would have been easy to do and 1 they would have no clue how much was in there cause they would not look but also If I wanted I could change the password. Now illness and death would get interesting, not sure in death what happens to a 529.

Onto changing beneficiary ==
Uhm no if you funded the 529 with your own money and your kid is the beneficiary you can change the beneficiary to yourself and remove it.

https://wsrp.com/...29-plan-withdrawals/

Example: Dave has a falling out with his daughter, who decides not to go to college. Dave liquidates her 529 account, which he funded with his own money, and uses the withdrawal to buy an expensive new car for himself. Assume the 529 withdrawal includes $8,000 of earnings. Dave must report the $8,000 as miscellaneous income on his Form 1040. In addition, he will be socked with the 10 percent penalty tax on the $8,000.

Interesting according to this article if the owner of the 529 is a dependent student the asset is reported as a parent asset. https://www.savingforcollege.com/...rent-owned-529-plans

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Count I mean exactly what you’re saying. It counts on the fasfa based on who the custodian is, if it counted as the beneficiary you could move out of one who does need aid into the one that doesn’t need aid, so it looks like the one who does need aid has less value overall. They made it based on the parent so you can’t do that. It counts all accounts the parents own.

I trust my dad too, but that doesn’t mean most people would be willing to give up that ownership. Especially if their parents are older.

3rd point, if you change custodian to your dad, YOU cannot change anything anymore legally. They are now legally the custodian, it doesn’t matter who put the money in. They are the custodian now they are allowed to change the beneficiary to whomever the rules allow, which may not be your kid anymore. I’m not saying you aren’t allowed to change the beneficiary if you’re still the custodian, I know you can do that.

Ok, well now we can try to clear up this mess.

There are 2 different types of 529 plans Individual and Custodial (explains why I have been using the term owner, and you guys Custodians)

https://finance.zacks.com/...-529-plan-11363.html

Two types of 529 plans - individual and custodial - meet the same savings goals, but they have some different characteristics. One notable difference is that the account owner in an individual plan remains the account owner. But in a custodial plan, the account owner (designated as the custodian) manages the account until the beneficiary (a minor child) reaches the age of majority. At this time, the beneficiary becomes the account owner.

My kids have individual 529's and I am the owner of them. I will setup individual 529's for my grandkids and I will be the owner, but most likely relinquish day to day operations to my kids for those accounts.

Interesting part of Custodial 529's from same webpage above -- Once your child is of age, the money in a custodial account can be withdrawn for any purpose without penalty.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

NOPE SCREWED THAT UP, only 5.6% of parent assets are used for expected family contribution. So $70k thats $3640 split by the 2 so it only cost me $1820 the first year, and less each year after, probably $3000 overall. So still not chump change but not the $12k I stated above.

Wanted to get the numbers correct.

Some good info here https://www.savingforcollege.com/...r-529-account-script

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

No you’re confusing 529 and custodial account. You’ll get penalties for withdrawing from a 529 without using it for education. Custodial 529s aren’t custodial UTMA/UGMA. That said zacks does a pretty crappy job on using the same words for different things.

“Another frequently cited advantage of 529s is that they remain in the control of the custodian; once your child reaches 18 (or 21 in some states), if they decide to pull the money in a custodial account for a Bitcoin investment or to invest in penny stocks, there's nothing you can do about it.
In certain circumstances, however, that disadvantage could become an advantage. Once you've committed funds to a 529, it must be invested in your child's education; otherwise, if financial circumstances – or if your child just doesn't want to go to college – require a noneducational withdrawal, you'll not only have to pay taxes on it, you'll probably be subject to a 10 percent IRS penalty. Once your child is of age, the money in a custodial account can be withdrawn for any purpose without penalty.”

This place is kind of like a park... we seem to have a bit of a conundrum here :-)

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maybe she's born with it, maybe it's chlorine
If you're injured and need some sympathy, PM me and I'm very happy to write back.
disclaimer: PhD not MD

I find getting lots of viewpoints is good.

Then just go with the theory
Take the best, ignore the rest.

Well tell you what, I have spent to much on this now, and am more confused then ever I can't figure out if Custodial 529 is just another name for UTMA/UGMA or if it really is something else.

Anyhow, never had a desire for a custodial account. I'll stick with nothing dishonest in having a grandparent as owner of a kid's 529. Someone asked about left over money another cool option, is the kid takes over as owner, and when they have a kid they make them the beneficiary.

Anyhow been fun, learned some, confused about more. Kids college funding money is mostly gone, so little impact to me.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

UTMA/UGMa is an after tax taxable brokerage account for a minor with a custodian, aka a custodial account I have one for each kid they’ll get whatever is in there when they turn 21. UTMA is uniform transfer to minor, UGMA is uniform gift to minor. Basically the same thing few small differences. But any money put in there is a irrevocable gift you can’t take it back.

A 529 is a 529. The only reason there is a custodial custodial 529 and one isn’t a custodial is because minors can’t sign paperwork. If I opened a 529 for myself, it wouldn’t be a custodial because why would I be a custodian for myself it doesn’t make sense.

Anytime someone mentions a custodial account for minors they’re pretty much guaranteed to be talking about UTMA/UGMA. It’s just inferred a 529 is going to have a custodian because it’s very rare to open a 529 for yourself or a non-minor. There are situations it makes sense but they’ve a very select few.

You’re getting hung up on the word custodial. That has nothing to do with anything except it mean someone else is acting on behalf of the beneficiary of the account.

No I am the owner of 3 individual 529's I am the owner, it never rolls to the beneficiary, it's not custodial.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Buy a Snoo, best money ever spent, kid sleeps like a dream.

Always keep 2 burp cloths handy, when the first gets saturated, it’s too late to start looking for another.

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There are three kinds of people, those who can count, and those who can't.

accept that you have no idea what you’re doing or what you’re in for.

This ^^^ I have two kids and they are nothing alike. I have two brothers and we are all different, radically so.

Parents that think they know what they are doing either have had 12 dozen kids or got lucky.

That however would lead to my advise. You have to be flexible, roll with the punches and never feel like you know what you're doing... because if you do you won't be open to a different, likely better approach.

That being said take this advise with a grain of salt because I have NO idea what I'm doing.