<prompt> Human: My 3 very lucky children have two sets of grandparents that want to save money for the kids college funds.For the sake of their own taxes, should the grandparents make third-party deposits to the pre-existing 529 funds weve already set up, or should they set up their own separate 529s?  <response>: Assuming the state that the grandparents live in has state income taxes and provides a tax deduction To find out, go here click on their state, and pay attention to the State tax benefit line, for the sake of their own taxes, they should set up their own 529s with your children as the beneficiary. However, grandparent owned 529s are treated slightly differently for financial aid calculations. Grandparent owned 529s are not included on the FAFSA like parent or student owned 529s are, but distributions from grandparent owned 529s are considered student income on the following years FAFSA. As such, it is best to use grandparent owned 529s to pay for the students final year in school, in order to avoid adversely effecting any available financial aid. 