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this is Clark Howard so I have encouraged grandparents over the years when theyve called me to ask about putting money aside for a grandchild to do whats known as a 529 college savings plan where you set up money in a tax-free account that grows tax-free and if used by the grandchild for college expenses is spent tax-free but now theres a new gotcha that I need to make sure youre aware of it more and more colleges they dont like the fact that all these grandparents are putting money aside for grandkids and they are affecting what financial aid a grandchild might qualify for through the 529 account thats sitting there so what can you do if a grandparent instead gives a son or daughter the money to put into a 529 account that the mom or dad owns on the child then you dont have to worry about the financial aid stuff thats right its so the grandparent owning the account the parent owns it
