529 for nephew -- have had a falling out with his father

[Anonymous]

I started a 529 for my nephew when he was born. I was childless at the time and my uncle had done something similar for us, and I have always appreciated it.

Fast forward 15 years and my brother isn't speaking to me. I always assumed I'd hand the money over to him when nephew turned 18. Can I just give it to my nephew? He will be 18 when college starts, so an adult.

And brother is beneficiary of account if I die. Should I change that? Can I change that to my nephew? Or should I just make it my husband like everything else? He'd give the cash to my nephew if something happened to me.

[Anonymous]

Anonymous wrote:I started a 529 for my nephew when he was born. I was childless at the time and my uncle had done something similar for us, and I have always appreciated it.

Fast forward 15 years and my brother isn't speaking to me. I always assumed I'd hand the money over to him when nephew turned 18. Can I just give it to my nephew? He will be 18 when college starts, so an adult.

And brother is beneficiary of account if I die. Should I change that? Can I change that to my nephew? Or should I just make it my husband like everything else? He'd give the cash to my nephew if something happened to me.

The 529 $, if not withdrawn by you (with penalty if you wdraw it), is paid directly to the college on behalf of the beneficiary (your nephew). Neither your brother NOR your nephew ever touch the money. It goes to the school.

Yes, sure, make your nephew the beneficiary if you die and take your brother out of the loop.

[Anonymous]

Do you have any relationship with nephew? If you want to give him the money then I think you do need to at least advise him it's there. Not simply a matter of just sending it to the college.

If you are not in touch with brother or nephew you may just want to change the account to be in your child's name. Pretty sure that who the account is for, is not set in stone.

[Anonymous]

Yes, I would give the 529 straight to your nephew at 18, and also decide now who should be the beneficiary(ies) on your accounts. You could do your husband for most things, but leave a bequest in your will or leave some other account to your nephew so he has spending money at college or a start on a down payment someday.

If something happens to me, the bulk of my estate will go to my daughter - house proceeds, insurance policies, retirement accounts, 529 - but I've designated some money ($10K each) for each niece and nephew for college, since their parents don't have much.

[Anonymous]

Fund your nephew's education (don't let him go overboard on an bloated private education studying basketweaving), paying 1 semester at a time. Get a copy of his grades to protect yourself - some kids will check out, not take classes if you're paying the tab. I've seen it personally

[Anonymous]

You can certainly transfer it to the college, which is your best bet. The 1099Q or R or whatever it is will then be in your nephew's name and he will claim it on his taxes, which will be offset by expenses. If you get the check and give it to him you will get the 1099Q and have to produce proof of using it for qualified college expenses, which you won't have. You do need to communicate with your nephew or you brother about this because the 529 amount can't exceed qualified expenses and they need to be able to plan for it in making their payments (I am assuming you are not funding the whole bill, if you are you may need to work out a different arrangement with your brother/nephew so you do have some proof of expenses).