My partner’s 55 yo mother just adopted a distant relatives infant child. She is horrible with money and finances and has no retirement for herself and spends above her means. Despite many of the concerns that her three oldest bio sons had regarding the adoption, she went through with it and now has another child to raise for better or worse.
The baby has literally every toy, item, object, and stuff it could need for years and even the things that would improve their lives as parents, they refuse to use (like a crib…she cosleeps or literally holds him to sleep)
I’d like to donate some money as birthdays and events start coming up so that I’m not contributing to trash or junk that isn’t helpful in his life.
We don’t want his mother to have any access to this money ever. They could easily fall on hard times and would pull it out in an instant. They know nothing about setting up accounts or anything like that and he doesn’t have any 529.
Is it possible to set soemthing up like this for a non related child?
My partners mothers took out student loans in her sons name to go shopping years ago and never paid them back while my husband is still paying them off. I don’t trust her to use any sort of money wisely.
How to gift cash to an infant for education savings?
byu/NeatSuspicious655 inpersonalfinance
Posted by NeatSuspicious655
5 Comments
>Is it possible to set soemthing up like this for a non related child?
The child would be your partner’s sibling (awkward) so partner could setup a 529 for the child’s benefit and not have to worry about weird ownership change rules that would impact you
As far as I am aware you can establish a 529 plan for anyone. You do not need to be related. You will just set them as the beneficiary. Then turnover the account to them (or continue to manage it yourself) once they turn 18.
The 529 plan is a good option as it may have state tax benefits for you – in my state I can deduct up to 4k per beneficiary annually. It’s minor savings on state taxes – but fewer taxes is always better.
If they don’t go to college – then new rules say the beneficiary can roll it into a ROTH IRA.
I have a family member who set up savings accounts for my kids. For holidays, she would send them a card with fake money and deposit that amount into their account. When they turned 18, she transferred the money.
You can set up a 529 for a non-related child, as long as you have her/his social security number. You own the account and he/she is the beneficiary. Your mil would not have access to the funds.
Set up a 529 plan, set them as the beneficiary. If you ever want, you can even use the funds for another kid’s education expenses, since the funds are transferable to other 529 plans.
https://www.irs.gov/newsroom/529-plans-questions-and-answers