Yes, you can transfer your son's unused 529 plan funds to an account for your grandchild without incurring taxes or penalties, provided certain conditions are met
. The key requirement is that the new beneficiary must be a qualified family memberof the original beneficiary (your son). The IRS's definition of a qualified family member is broad and includes:
- The son's children or descendants (which are your grandchildren).
- Siblings or step-siblings.
- Parents or ancestors.
- First cousins.
- Various in-laws (mother-in-law, brother-in-law, etc.).
