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529 college savings plan for relative

Chris Farrell Apr 1, 2010

Question: I want to open a 529 account for my nephew (who’s turning one next week) and contribute to it. Can I do so? Or only my nephew’s parents can do so? They live in PA. I would like this as a surprise on his birthday but if I do require help from my nephew’s parents, that is fine too. I also have an existing 529 (in my name) which I established for my own education. Is it better to transfer the assets to nephew, instead of starting a new 529 fund? Ashu, Minneapolis, MN

Answer:It’s a wonderful idea. I’ve noticed that we’re getting more questions like this, too. My suspicion is that more people than ever would like to make gifts with value rather than another toy. (Not that there is anything wrong with toys!)

Anyway, to your question: A big advantage of 529 college savings plans is their flexibility. You can do everything you ask: Set one up for your nephew (but you will need his Social Security number to do it); get his parents to open up an account and you contribute to it; or make him the beneficiary of your existing 529 plan.

However, my advice is to talk with the parents about your desire to help defray the future cost of college for your nephew. It would be best if they established the account. You could then make contributions when it’s convenient–and so could they. (By the way, anyone else can put money into the 529, from his parents to friends.)

I’ve mentioned this website before, but a terrific resource when it comes to all things 529 and the various rules is Another good website that deals with all the financial aspect of paying for college is

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