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You can transfer 529 plan money to a LOT of family members
Founder & CEO

You can change the beneficiary of a 529 plan quite easily, without tax or penalty when the new beneficiary is a "member of the beneficiary's family", as defined by the IRS.

Luckily, the IRS has a pretty expansive definition of "family":

Straight from the IRS (bolding is mine, and I've added some comments):

The beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary:

1) Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them

Look at that, you can sit tight and wait for grandkids to arrive on the scene!

2) Brother, sister, stepbrother, or stepsister

Moving money between siblings is a popular choice...consider this if you're in a state that awards tax deductions on a "per-beneficiary" basis. Not sure if you are? Our AboveBoard College Savings Guide will tell you.

3) Father or mother or ancestor of either

Feel like going back to school for fun during retirement? Maybe get that Master's Degree in something you love? Awesome, you can use any left over 529 plan money.

4) Stepfather or stepmother

5) Son or daughter of a brother or sister

Nieces & nephews are included!

6) Brother or sister of father or mother

Aunts & uncles are included!

7) Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law

Feel like giving money to your kid's mother-in-law? You can if you want!

8) The spouse of any individual listed above

9) First cousin

Source: IRS Publication 970

Wallis is the Founder & CEO of AboveBoard Financial, a company reinventing investment advice and insurance with revolutionary transparency and honesty. Wallis spent over 10 years at Goldman Sachs as an investment banker and hedge fund investor in financial institutions. She founded AboveBoard to cut through the BS and present important choices with clarity and compassion. Wallis lives in New York City with her husband and two young children.

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