<p>I’m going to post a summary of the some of the more surprising things I’ve learned on this thread, in the event someone pulls it up with similar questions in a future search:</p>
<p>1) As of 2009-10, Custodial accounts (UGMA/UTMA) may be transferred to 529 UGMA/UTMA accounts. These accounts are viewed as parental assets in Federal financial aid calculations, and in the calculations of SOME private schools. However an important caveat as reported in an excellent article at savingforcollege.com:</p>
<p>“You have to consider the consequences of liquidating the mutual funds and triggering capital gains. Any gains will not only be reportable on your child’s income tax returns, but they will also be included in base-year income on the following year’s FAFSA, which can cause a decrease in aid eligibility.
Also remember that we are talking here only about federal financial aid. For school-based aid (grants, scholarships, or tuition discounts from the school’s own funds), you are not likely to find the same advantage by moving UGMA/UTMA money into a 529 plan.”</p>
<p>2) Tuition paid directly by an individual does not count as gifts in calculating the annual gift tax exclusion. So payment of college tuition makes an interesting addition to estate planning for those fortunate enough to have assets to pass along. </p>
<p>Thanks again for all the useful comments</p>