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February 27, 2019
Question

Am I able to change my 529's beneficiary's to my domestic partner penalty-free?

  • February 27, 2019
  • 1 reply
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Am I able to change the 529's beneficiary's to my domestic partner penalty-free?

 

I have an NYS 529 account with myself as the beneficiary and would like to change the beneficiary to my domestic partner, who is currently enrolled in graduate school. Our domestic partnership is legal and recognized by the state. 

 

I called NYSAVES to ask whether I am able to do this and they said yes, but they recommended I double check with a tax advisor.

 

IRS Publication 970 defines members of the beneficiary's family as:

1. Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them.

2. Brother, sister, stepbrother, or stepsister.

3. Father or mother or ancestor of either.

4. Stepfather or stepmother.

5. Son or daughter of a brother or sister.

6. Brother or sister of father or mother.

7. Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

8. The spouse of any individual listed above.

9. First cousin.

 

I tried to research online, but don't see any specification in regards to a domestic partner. It seems possible because I am able to change beneficiaries to someone as distantly related as a brother-in-law.

    1 reply

    February 27, 2019

    Looks like everyone on the list is either a blood relative or the result of a legal (marriage) contact

    A domestic partner appears to be neither under the Federal guideline, even though it may be recognized in NY  - that is going to be the problem I suspect