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foo1bar: "In addition, my parents (my kid's grandparents) are in a state that does give an income tax deduction for 529 contrib.

And my spouse and I trust my parents.

And grandparent's assets aren't part of FAFSA.

So my best option is to give money to my parents and have them contribute to the 529 in their state for benefit of my kids.

It's like a guaranteed extra ~5% ROI for the first year, and the investment options in the grandparent's state are just as good."

Depending on how much you are giving beware of limits for annual gift tax exclusion.

When withdrawing, be aware of the rules for how grandparents' payments from 529 count in kids income on FAFSA the next year.

Regards, JAFO
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