<p>Plus, correct me if I'm wrong...but I thought 529 monies needed to be used only for expenses for the year in which they are withdrawn. In other words...expenses for 2007 need to be paid in 2007, not 2008.</p>
<p>Quote: "529 set up years ago that he put money in over time and that he just changed the beneficiary to be his mother. It was our daughter."</p>
<p>How does the dad get to change the beneficiary to the D's grandmother? Is that even kosher???</p>
<p>It looks from IRS rules like you can change from original bene to "father or mother or ancestor of either" (of the beneficiary). But unless grandma is going to college, he can't withdraw without taxes and penalty.</p>
<p>i do not think it matters why the father does not want to use the 529 money. it is his money do with as he wants. i myself set up a 529 years ago because i was stupid enough to think the financial counselors at the bank were smarter then me. all they wanted was my money in their bank so they could get a commission. I could have put that money into any investment tax free or otherwise and it would have made just as much interest if not more by now and then just use it for my kid now as i see fit.</p>