<p>Can 529 funds in one child's name be used for another child? Thanks.</p>
<p>You'll need to change the beneficiary of your 529 from one child to the other. The new beneficiary must be in the same family as the old beneficiary, and must be of the same generation. For parent-owned 529s this is relatively easy to do. Some plans limit the number of times a beneficiary can be changed to once per year, so you'll need to check your plan's restrictions if this is something you'd be considering.</p>
<p>^ I don't think it's the case that the new beneficiary needs to be "of the same generation" as the original designated beneficiary. To keep the 529 fund tax-free and penalty-free, the new beneficiary must be "of the same family" as the old beneficiary, as defined by the IRS. But the definition of "same family" has been expanded to include the following relationship to the old beneficiary:
*spouse
*son, daughter, or descendant of either
*stepson, stepdaughter
*sibling, stepbrother, stepsister
*father, mother, or ancestor of either
*nephew, niece
*aunt, uncle
*son-in-law, daugher-in-law
*mother-in-law, father-in-law
*brother-in-law, sister-in-law
*spouse of any of the above
* first cousin</p>
<p>See:</p>
<p>Publication</a> 970 (2007), Tax Benefits for Education</p>