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fyi... the 529 I have set up for DD is owned by me, but DD is beneficiary... Not sure if that makes a difference

I'm not very good with 529 plans, so take this with a grain of salt.

However, I think it makes a big difference. If you are the owner of the 529 plan, but take your DD's earnings and put it in there, I think you are transferring money from her to you. That she is the beneficiary is not important. You are the owner, and retain the right to withdraw the money (and take some tax penalties) or name a different beneficiary.

In effect, putting her money into that 529 plan is taking her money from her.

How that impacts you both morally and legally is not something I'm qualified to talk about.


PS - OK, we're all qualified to talk about morals, but that is a matter for a different board. But I'm definitely going to avoid the legal questions.
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