<p>Contributions to 529s fall under the Generation-Skipping Transfer Tax (GSTT) regulations, which includes a provision applicable only to Section 529 plans. Each grandparent may contribute up to five years’ worth of annual exclusion gifts in one year ($13000 X 5 = $65,000 per grandparent). Also, it’s the giver who has to be concerned about estate taxes, not the recipient</p>
<p>Vball – may I ask what you are referring to? Section 529(c)(5)(B) can result in GST if their is a CHANGE in the 529 plan beneficiary. The regulations specifically provide that if the gift is less than the annual exclusion amount the transfer to the 529 account is not subject to the GST.</p>
<p>P.S. I really hope there are not a lot of kids getting need based financial aid whose grandparents are worried about federak estate tax (only applicable to estates over 5million)</p>