Grandparent owned 529

profdad2021
Fri, 24 May 2019 14:06:30 +0000

@BelknapPoint Gonna ask you directly this question that relates to the original post.

On the specific issue of “transferring” ownership from the grandparent to a parent: I am wondering of transferring ownership is the only way/best way to get those funds in the parent-named account.

Say there is an account for the student Joe in the grandparent’s name in State # 1. The kid grew up with parent in State # 2.

Then for whatever reason, the parent and Joe want those funds in the parent’s name. It seems like there are two options:( I know that both options will mean that the dollars are IN the parent’s account and so will be included on the FAFSA.)

(1) work with grandparent to change name on the account in State # 1 (grandparent state) so that the account is now in the name of the parent.
(2) transfer the funds from the grandparent account in State # 1 to a pre-existing account in the parent’s name in State # 2.

Is Option (1) the only way to avoid immediately treating the money transfer like income for the student?

Does Option (2) require actually withdrawing the money first from the grandparent account and then immediately depositing into the parent account in the other state or is there a way to “transfer” without the dollars being treated like income? Do the two specific states matter?