College Fund for my out-of-state godson

[rangerfox]

I want to start a college fund for my godson, who is under a year old, but I have never done any of this before, as I have no kids of my own. Yet.

I looked at the Gerber Life Plan, but it is just that, a plan rather than a fund. I want something people can put into, and without a fixed payment, so I found out about 529's, but the information is so spread out and doesn't seem to cover what I am specifically looking for.

He, as well as almost all of his family, his godfather, and many of his parents' friends, live in one state (which does not benefit from out-of-state tax breaks for 529s), and I am a Pennsylvania resident. Would it be possible to start one for his state, while I myself am in another state?

And one more question; I heard the list of things that a 529 can cover related to college is broad. Does this include non-college trade school, should he decide to go that route? The way I see it, the extreme cost difference between that and college would more than make up the penalty, but it would be nice to know if it would be covered.

[TBH]

I believe you can open a 529 in any state you want, even if you're not a resident. Some state plans might prohibit this, but most don't. I am a Pennsylvania resident too. I have an in-state 529 plan for my son, but I also have a Massachusetts plan because I liked their investment options better. As a PA resident, my contributions to either plan are deductible (from state tax only.)

You can also look into a Gift to Minors Act account, which means the money belongs to your godson but someone (probably one of his parents) is in charge of the account until he's of age. But I think a 529 is better in this situation.

We had the same question about 529 plans with regards to trade school. I know we made sure both plans we're invested in can be used for trade school tuition. I forget whether all 529 plans can, so you might want to check individual plans. Also, if your godson ends up having more money than he needs in his college account ( a good problem) the money can be transferred without penalty to one of his siblings or his parents to go to school.

Check out savingforcollege.com for more info than you could ever want about this.

A few other tips--
You could sign up for Upromise, which tracks your grocery store spending etc and donates a percentage to a 529 plan for a designated kid. His other relatives could also sign up.

You could also sign up for SAGE Tuition rewards. The rewards are based on your 529 contributions and can be used at a specific list of schools. He may not end up going to a school on the list, but it doesn't cost anything to participate so you might as well.

Can I just say I admire your thinking of this. I have a goddaughter who I've thought of doing this for, but I'm afraid her mother might be offended. Also I now have a kid of my own and am fairly caught up in saving for his future. If you can afford to do this, even just until you have your own kids, it might make a big difference for your godson and is a very concrete way to show you are committed to being in his life for the long haul.