@ThomasM125 said: It may be best to have the proceeds paid to the beneficiary, as your grandchild may pay taxes at a lower rate than you, but you would have to do some tax planning to see what is best.
A non qualified distribution is considered unearned income. So, the student could be subject to the "kiddie tax", where a portion of his income is taxed at the parent's (not the grandparent's) marginal tax rate.
