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529 Plan Beneficiaries

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.
  • Son or daughter of a brother or sister.
  • Brother or sister of father or mother.
  • Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
  • The spouse of any individual listed above.
  • First cousin.

529 plans only allow one beneficiary per plan. Owners with multiple children or beneficiaries will need to determine their plan of action when it comes to funding in this situation.

While it would be easy to make a blanket recommendation on what to do, it depends on the goals of the owner, the age difference between beneficiaries, and the aspirations of the beneficiaries. For example, a 529 owner could have two children – let’s say their twins. Since 529 plans can only have one beneficiary, it may make sense in this situation to fund two plans, one for each beneficiary. When the funds are needed, each beneficiary has their own account for expenses.

Another example would be an owner with two children that are four years apart in age. In this situation the owner could consider funding one plan, with one beneficiary – say the oldest child. The owner could fund the plan based on funding college for two children, yet only have one beneficiary. When the oldest child starts college, money from the plan would fund his or her expenses. Then, when the oldest child graduates, the owner can make the youngest child beneficiary and continue to use the plan money to fund his or her education.

In some situations, college may not be for everyone. An owner could have college aspirations for the beneficiary, but the beneficiary may have other aspirations after high school. While the owner may be disappointed, all is not lost. One thing the owner can do is change the beneficiary to any of the options listed above and continue to use the money to fund higher education expenses.


  1. linda chen says:

    Beneficiary can’t be a grandchild?

    1. “…or a descendant of any of them.”

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