I want to establish a fund for grandkids with flexibility for distribution if they go to trade schools etc.
what is the best optins?

Trust fund for all kids
Individual fund for each kid
529 - not sure i like the returns on most.

Thoughts and suggestions?

It's a complicated subject, but make sure you understand how a 529 owned by a non-parent impacts student aid. We wanted to start a 529 for a neice, but ended up just using a brokerage account because of this (granted, she will likely be eligible for significant need-based aid due to her family's financial situation).

If funding can be covered for first 3 semesters, you can typically switch to a 529 (grandparent controlled) Spring of Sophomore year without material impact to need based aid.

This assumes the student will wrap up in 4 years.

The non parent owned 529 distribution as income penalty for fincaid dropped with Secure 2.0...

mosdefn14 said:

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The non parent owned 529 distribution as income penalty for fincaid dropped with Secure 2.0...

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I did not know this, thanks!

I carved out a section of my estate for each grandkid, contingent on them going to college. Now that's hard to enforce once I'm gone but the parents know it's there.

When our kids were born, we purchased credits in the Texas Tomorrow Fund. Not sure if the credits would apply to a trade or technical school, but they are transferable downward, ie: oldest doesn't go to school, next child in line can use.

Set their parents up as the owners for when you pass away. Transferring the 529 plans my MIL set up for our kids has been a little bit of a PITA.

bhuff111 said:

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When our kids were born, we purchased credits in the Texas Tomorrow Fund. Not sure if the credits would apply to a trade or technical school, but they are transferable downward, ie: oldest doesn't go to school, next child in line can use.

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I had Texas Tomrrow fund for my kids. Outstanding opportunity. They closed it because it was going bankrupt. Credits could be transferred. The new program cannot be transferred.

Yup!

Successor participant is the terminology here. I'm amazed how many advisors/brokers or even decently sophisticated self directed investors don't think about this.

Every plan/state has a different default successor unless specifically named. It can be a mess in the case of divorce, sometimes going to the parent of the beneficiary who's birthday comes first in a calendar year, rather than who is oldest or who is a descendant of the original participant (account owner). So, you could see your account (for the benefit of your grandchild) transfer to your ex daughter in law rather than your son, for example.