529 transfer between immediate family members

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Topic Author
seadreamer
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Joined: Fri Dec 07, 2018 4:42 pm

529 transfer between immediate family members

Post by seadreamer »

Spouse has $10,000 in 529 account at Vanguard with himself as owner and beneficiary. I have been taking online classes this year and would like to use some of these funds for course expenses not reimbursed by work. As I understand, we need to do a transfer of funds to my own 529 plan.
1) Would there be any issues with him being the owner and myself being the beneficiary? It seems like this is the easiest to do online.
2) I bought a computer for classes last month. If we transferred the funds could I include the computer in this year's 529 withdrawals?
3) Any other things I should be aware of when transferring funds between family members? Waiting periods etc....

Thanks! I will contact Vanguard to ask these questions too but I appreciate the bogleheads experience/wisdom.
Flyer24
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Re: 529 transfer between immediate family members

Post by Flyer24 »

Do you already have a 529 account with yourself as a beneficiary? Are these higher education-related classes?
Topic Author
seadreamer
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Joined: Fri Dec 07, 2018 4:42 pm

Re: 529 transfer between immediate family members

Post by seadreamer »

No I do not have my own 529 with myself listed as the beneficiary. Yes, the classes are at a state college.
DIFAR31
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Re: 529 transfer between immediate family members

Post by DIFAR31 »

Unless your spouse is currently using his 529 for his own qualified expenses, it would be much easier to simply change the beneficiary to you as long as you have 529 qualified expenses. Change the beneficiary back to your spouse or another eligible family member when it suits your family's needs.
Topic Author
seadreamer
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Joined: Fri Dec 07, 2018 4:42 pm

Re: 529 transfer between immediate family members

Post by seadreamer »

Thanks for the reply. He is also using the 529 this year for work-related university courses. His work partially reimburses tuition costs only - no university fees or required materials.
marcopolo
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Re: 529 transfer between immediate family members

Post by marcopolo »

seadreamer wrote: Thu Aug 27, 2020 2:09 pm Thanks for the reply. He is also using the 529 this year for work-related university courses. His work partially reimburses tuition costs only - no university fees or required materials.
I don't think same 529 account can be used for two different beneficiaries.

But, what you should be able to do is have your husband open another 529 with him as the owner and you as the beneficiary.
Then transfer some dollars (enough to cover your expenses you want to pay for the year) from the current account to the new one.

You could do it with yourself as the owner, but it can be more of a hassle to transfer funds from one owner to another, but from one beneficiary to another is straight forward.
Once in a while you get shown the light, in the strangest of places if you look at it right.
Topic Author
seadreamer
Posts: 22
Joined: Fri Dec 07, 2018 4:42 pm

Re: 529 transfer between immediate family members

Post by seadreamer »

marcopolo wrote: Thu Aug 27, 2020 2:38 pm
seadreamer wrote: Thu Aug 27, 2020 2:09 pm Thanks for the reply. He is also using the 529 this year for work-related university courses. His work partially reimburses tuition costs only - no university fees or required materials.
I don't think same 529 account can be used for two different beneficiaries.

But, what you should be able to do is have your husband open another 529 with him as the owner and you as the beneficiary.
Then transfer some dollars (enough to cover your expenses you want to pay for the year) from the current account to the new one.

You could do it with yourself as the owner, but it can be more of a hassle to transfer funds from one owner to another, but from one beneficiary to another is straight forward.
Thank you. This confirms my gut feeling that we should keep him as the owner instead of transferring funds from one owner to another. I don't want to overcomplicate.
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