529 Change Beneficiary to Cousin

529 College Savings Plans

529 plans are tax-advantaged savings plans designed to help families save for college expenses. Contributions to a 529 plan grow tax-free, and qualified withdrawals are tax-free as well. 529 plans can be used to pay for tuition, fees, room and board, and other qualified expenses at eligible educational institutions.

Changing the Beneficiary of a 529 Plan

The beneficiary of a 529 plan is the person who will receive the money in the plan when the student enrolls in college. You can change the beneficiary of a 529 plan at any time. To do so, you will need to contact the plan provider and complete a change of beneficiary form.

Can I Change the Beneficiary of a 529 Plan to My Cousin?

Yes, you can change the beneficiary of a 529 plan to your cousin. However, there are some important things to keep in mind.

• Gift tax implications. If you change the beneficiary of a 529 plan to someone other than your child or grandchild, you may be subject to gift tax. The annual gift tax exclusion for 2023 is $17,000 per person. This means that you can give up to $17,000 to each of your cousins without having to pay gift tax. However, if you give more than $17,000 to a single cousin, you will need to file a gift tax return and pay gift tax on the amount over $17,000.
• State income tax implications. Some states have income tax implications for changing the beneficiary of a 529 plan. For example, California imposes a 2.5% income tax on withdrawals from a 529 plan if the beneficiary is not a California resident.
• 529 plan rules. Some 529 plans have rules about changing the beneficiary. For example, some plans may require you to wait a certain period of time before you can change the beneficiary.

How to Change the Beneficiary of a 529 Plan to Your Cousin

To change the beneficiary of a 529 plan to your cousin, you will need to:

1. Contact the plan provider and request a change of beneficiary form.
2. Complete the change of beneficiary form and return it to the plan provider.
3. The plan provider will process your request and change the beneficiary of the plan.

529 Plan Considerations

Before you change the beneficiary of a 529 plan, you should consider the following:

• Your financial goals. What are your financial goals for your cousin? Do you want to help them pay for college, or do you have other financial goals for them?
• Your tax situation. What are the tax implications of changing the beneficiary of a 529 plan? Will you be subject to gift tax or state income tax?
• The 529 plan rules. What are the rules of the 529 plan? Are there any restrictions on changing the beneficiary?

Benefits of Changing the Beneficiary of a 529 Plan to Your Cousin

There are several benefits to changing the beneficiary of a 529 plan to your cousin, including:

• You can help your cousin save for college. A 529 plan can help your cousin save for college expenses, which can be a significant financial burden.
• You can reduce your gift tax liability. If you change the beneficiary of a 529 plan to your cousin, you may be able to reduce your gift tax liability.
• You can help your cousin achieve their financial goals. A 529 plan can help your cousin achieve their financial goals, such as paying for college or starting a business.

Tips for Changing the Beneficiary of a 529 Plan to Your Cousin

Here are a few tips for changing the beneficiary of a 529 plan to your cousin:

• Talk to your cousin first. Before you change the beneficiary of a 529 plan, talk to your cousin about it. Make sure they understand the benefits of a 529 plan and that they are willing to be the beneficiary.
• Contact the plan provider. Once you have talked to your cousin, contact the plan provider and request a change of beneficiary form.
• Complete the change of beneficiary form. Complete the change of beneficiary form and return it to the plan provider.
• Keep records of the change. Keep records of the change, such as a copy of the change of beneficiary form.

FAQs About Changing the Beneficiary of a 529 Plan to Your Cousin

Here are some frequently asked questions about changing the beneficiary of a 529 plan to your cousin:

• Can I change the beneficiary of a 529 plan to my cousin at any time?

Yes, you can change the beneficiary of a 529 plan to your cousin at any time. However, some plans may have restrictions on changing the beneficiary.

• What are the tax implications of changing the beneficiary of a 529 plan to my cousin?

If you change the beneficiary of a 529 plan to someone other than your child or grandchild, you may be subject to gift tax. The annual gift tax exclusion for 2023 is $17,000 per person.

• Can I change the beneficiary of a 529 plan to my cousin if I am not the account owner?

No, you cannot change the beneficiary of a 529 plan to your cousin if you are not the account owner. Only the account owner can change the beneficiary of a 529 plan.

• What should I do if I want to change the beneficiary of a 529 plan to my cousin but the account owner is deceased?

If the account owner of a 529 plan is deceased, you will need to contact the plan provider to find out what options are available to you. You may be able to change the beneficiary of the plan if you are the successor beneficiary.

• What should I do if I want to change the beneficiary of a 529 plan to my cousin but the account owner is incapacitated?

If the account owner of a 529 plan is incapacitated, you may be able to change the beneficiary of the plan if you have a power of attorney for the account owner. You should contact the plan provider to find out what options are available to you.

• What should I do if I want to change the beneficiary of a 529 plan to my cousin but the account owner is unwilling to change the beneficiary?

If the account owner of a 529 plan is unwilling to change the beneficiary, you will not be able to change the beneficiary of the plan. You may want to consider talking to the account owner about your financial goals for your cousin and why you want to change the beneficiary of the plan.

Conclusion

Changing the beneficiary of a 529 plan to your cousin can be a great way to help them save for college. However, there are some important things to keep in mind before you make the change. Be sure to consider your financial goals, your tax situation, and the rules of the 529 plan. If you have any questions about changing the beneficiary of a 529 plan, be sure to contact the plan provider.

Tables

Table 1: State Gift Tax Rates

Table 2: Federal Gift Tax Rates

**Table 3: