My brother is not working and waiting on social security disability approval. He has two small children 6 and 10, what is the best way for me to set up savings for their education so that it doesn't adversely impact his ssdi app or my tax situation? Coverdall? 529?
529 Plans vs Coverdell ESA is a question where I provided a brief answer of the difference of these two accounts.
For your situation, I'd add that the 529 offers you a layer of protection, in that the account can remain your property with the children as beneficiaries. In other words, should your brother's fortunes change, or should the kids get full scholarships, you can change the beneficiary back to yourself, and withdraw the money (Tax and penalty, but the money is still yours.)
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