Under "normal" federal gifting laws, you may only gift $12,000 per year to any one beneficiary. Under Section 529, there is a unique 5-year gift-averaging rule. This allows one to gift *$60,000 (or $120,000 for a married couple filing jointly) to a beneficiary in one year, without any federal gift-tax implications, as long as you do not make any gifts to this beneficiary over the next 5 years.

Additionally, the beneficiary on an account can be changed to another member of the original beneficiary's family at any time. **

*Subject to an add-back rule in the event of the contributors death within the five-year period.

**If the new beneficiary is of a younger generation than the old beneficiary, the transfer may be subject to a generational skipping tax.

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