The rules in this chapter
- 1You are in control.A 529 plan requires three entities: an owner, a beneficiary (usually a potential student), and a successor or death beneficiary.
- 2You are and will stay the owner of the 529 funds. Funds may be disbursed back to you at any time.The owner is usually a parent or grandparent.
- 3You decide the beneficiary.Each account needs a named beneficiary with a social security number and physical address.
- 4Each account should have a Successor, in the case of the Owner’s death.Naming a death beneficiary/successor is not required, but highly recommended to avoid probate or Uncle Sam taking control if you pass.
- 5You can decide to CHANGE your ownership to someone else without a fee at any time.Importantly, an owner (such as a grandparent) may transfer ownership while living or at death without penalty to avoid having to administer or have liability for the account.
- 6You can decide to CHANGE the Beneficiary to someone else–including yourself–without a fee at any time.As account owner, you have the right to modify the beneficiary at any time.
- 7You can decide to CHANGE the Successor to someone else without a fee at any time.If a beneficiary or their parent is not totally financially trustworthy, consider your Trust as a successor entity (the funds remain outside of your estate gifting limits.) Your trustee will help deci
- 8Account owners can have unlimited family and friend beneficiary accounts.A grandma decides to gift $50 per year for each child, grandchild, and great grandchild, a total of 33 accounts.
- 9Beneficiaries may have unlimited accounts in their name from different parents, grandparents, kind friends, etc.JR is in graduate school and just married Tisha.
- 10Deposits are made via direct payroll deposit, check, ACH, or wire. You can link your bank account for monthly or one time contributions.Deposits to a 529 account may be made by check or pulling electronically from a bank account.
- 11Employers, trusts, and other entities may contribute.A trust, corporation or other entity that opens an Institutional Account can be the account owner.
- 12Tax returns or PFDs can be directly gifted to the 529 plan.Instead of potentially squandering your federal tax return each April, why not contribute to one or more 529 accounts?
- 13Special occasion gifts can be made by others for graduation, birthday, or other special days.Gifts from others–including for birthday or another present–are accepted.
- 14Transfers may be made between accounts of family members.Transfers of funds between in-family beneficiaries generally count as allocation changes, limited to 2 times per year.
- 15ABLE* accounts for disabled people may be rolled over up to $19,000 per year from a 529 plan.Up to $19,000 (the 2026 annual gift tax exclusion amount) may be rolled over per year from a beneficiary’s 529 to a disability-focused ABLE account.