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I am not sure when the child has control of the money
but there are steep fees and taxes due when money from
an educational IRA is withdrawn but not used for
education expenses...for a college-bound child I would
think one could convince them to use the IRA for
college (to avoid the fees) and get a job if they want
money for another expense.

As far as whether this is legal, I would think not.
You need to designate a beneficary for the account
when it is established, can only contribute until the
beneficiary becomes 18, and must close out the account
by the time the beneficiary is 30. While you can
change the beneficiary to your own child, there is a
lot of rules to deal with and it may not be worth the

A single co-worker of mine decided to put money into a
ROTH IRA for possible children he might have someday.
You would have to read up on the details first but it
sounded promising since you can use ROTH IRA money for
college without penalities, keep control yourself,
and can use any "excess" for your retirement.
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