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Nimis's avatar

Can my sister open a 529 for our niece?

Asked by Nimis (13100 points ) September 13th, 2011 from iPhone

My niece is 12 this year. We’d like to start saving for her college tuition, as her mother is not in a position to do so herself. (And her father is not in the picture.)

My sister is thinking about opening a 529 (in California) for her. Can you open one for a family member, but who’s not a legal beneficiary?

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4 Answers

Imadethisupwithnoforethought's avatar

Yes you can.

You retain control of the money as well. If the child does not go to college, you, within some states and certain plans, should be able to roll that money over to another individual.

I grabbed this link to double check my information:
http://money.howstuffworks.com/personal-finance/college-planning/financial-aid/529.htm

Rarebear's avatar

Yes. But consider other states. AFAIK there is no tax advantage to opening up in California. I live in California and my daughter’s 529 is through Iowa because they use Vanguard and the fees are lower. Lots of information here. http://www.savingforcollege.com/intro_to_529s/what-is-a-529-plan.php

Nimis's avatar

@Imadethisupwithnoforethought Thanks!

@Rarebear Whoa. Didn’t even know you could go through another state. Crazy. Thanks!

Rarebear's avatar

I’m pretty sure Utah uses vanguard funds also. Not that there us anything special about them except they are known for low cost index funds.

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