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JMO - but if it's possible, I'd go with giving the money to the grandparents and they can even pay the college directly (so no gift tax implications for them)

This is a terrible idea, IMHO. There can be gifting issues but more importantly, once the money is someone else's, they can do whatever they want with it. Consider death and remarriage and what that brings to the table. However, should grandparents choose to provide a 529 for a grandchild, there are estate benefits there. But it is the owner of the 529 who determines and can change the beneficiary.

For anyone considering 529s, be sure to look at the ownership information - all of it and the manner in which the beneficiary can be changed.

Also, if trying to play games with ownership among siblings, be sure to check out majority age for financial transactions in your state.

As always, this is worth what you paid for it.
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