Money from Grandma?

Marzies
Mon, 10 May 2010 21:01:44 +0000

Hello fellow parents,
I have a question as to how to best use $$ from my son’s grandmother. He’s starting at a private Jesuit college in the fall; he’s rec’d some financial aid, but certainly not a full ride. My question is this: His grandma has been putting $$ aside, which now totals approx. $10K. It’s not in a 529 or other college plan, however. It’s in a “regular” investment plan, so will be subject to taxes upon withdrawal. We also have put aside about that much in a 529 plan (pathetic, I know!). I’m thinking that he should use her contribution first, and then we should go to the 529 (allow it to accumulate more tax free $). If we do, should he withdraw it and claim it on his taxes (he will only have income from a summer job and work study of about $2,400 for the 1st semester) or should we ask her to take it out, and subtract whatever tax liability she’d incur? Would appreciate your thoughts (and I do realize that it’s opinions ONLY, not professional advice!) That said, any opinions are much appreciated!