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Lee:

You might wish to consider a tuition savings program made available under Section 529 of the Internal Revenue Code. Some of the characteristics:

1. Tax-deferred investment growth.
2. No income limits.
3. Contributions Eligible for Gift Tax Exclusion.
4. Investor (Grandma) maintains ownership.
5. Beneficiary must use funds for higher education.
6. Grandma can change her mind as long as she lives. (This is subject to some IRS limits).

Further, funds contributed to Section 529 accounts are immediately excluded from the account owner's taxable estate; however, the owner may still 1) Change the beneficiary; 2) Withdraw money for the owner's use (subject to 10% tax penelty); and 3) Only the owner may direct withdrawals.

Hope this helps.

--WauseonFox--

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