<p>There are different ways of setting up 529s. The most common is a parent-owned 529 with the child as beneficiary. That’s different from what’s being discussed here. Money in a UTMA is owned by the child, with the parent as custodian. If that UTMA money is to be transferred to a 529, the title must remain the same. So the new 529 must be a child-owned 529, which is also known as a custodial 529. It’s a 529 owned by the child, with the parent as custodian. Your financial institution can probably handle the transfer so that it’s done correctly - it’s not a difficult process.</p>
<p>All 529s are treated as if they were parent assets by FAFSA, even child-owned 529s, and are assessed at the parent rate of 5.6%.</p>