A college fund is a 529. It can only used to pay college bills, including room & board for the named individual, sibs or close relatives. IOW the unused portion can be passed down.
The money grows without taxation in the account and if used for education the withdrawn money is also tax free. 529 plans are not used in calculating grants and aid.
The parent/grantor owns the plan not the named child. The plan was started by the parents so that they could help with college expenses not as a nest egg. The $ cannot be taken out to start a business without a 10% penalty and the withdrawal counts as taxable income as well if it is not used for school expenses. The boy has no right to the $ and if he is trying to pressure his parents they need to step back.
Didn’t know about this 529. Need to look at things.
Thanks. ;-)