529 accounts — grandparent or parent?
I have opened and contributed to college savings accounts for my 3 grandchildren – ages 12, 16 and 17. The accounts are in my name and my darlings are the beneficiaries. Should I change ownership to their names (or their parents’ names)?
How will this affect their chances for a scholarship or a grant?
Terry Says
Under current law, these accounts will only be considered THEIR assets (thus impacting student financial aid) in the year AFTER they take withdrawals to pay for school. So if their parents have other savings, and if they can wait to use this money until their final year of school, there will be no impact.
But if this is the main way your family is saving for college, then ask the parents to open new 529 accounts, and add your contributions each year to that account. Custodial accounts by parents have much less impact on financial aid.
