Owners (usually parents) of 529 plans set them up for the purpose of funding future college education expenses for beneficiaries (usually their children). However, 529 plans allow for beneficiaries other than the owner’s children. Beneficiaries may be changed on 529 plans at the owner’s discretion.
Who qualifies as a beneficiary for a 529 plan? According to IRS Publication 970, the following may be beneficiaries of 529 plans:
- The account owner.
- Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them.
- Brother, sister, stepbrother, or stepsister.
- Father or mother or ancestor of either.
- Stepfather or stepmother.