I now think I made a mistake and should have simply added the money to the 529 college savings plan we have for him. Another benefit I see to doing so may be that the funds might not be considered in financial aid calculations. He will not qualify for aid based on need as we are financially well off but he may qualify for aid based on merit. Answer: You can transfer the funds from a custodial account, but contributions to 529 college savings plans have to be made in cash. If your primary concern is financial aid and your family won’t qualify for need-based help, then there may be little reason to incur that tax bill right now.
