If the taxpayer makes sacrifices to save for a child’s education, the taxpayer certainly wants to make sure those savings end up being used for education and not some other purpose. 529 plans allow the taxpayer to keep control of the account. If the taxpayer saves money for college in a UGMA or UTMA (the name depends on the state in which the taxpayer lives and are essentially custodial accounts set up for minors), the account becomes the child's property once he or she reaches the age of majority — usually 18 or 21 — at which time the taxpayer loses control. So while the taxpayer’s intent may have been to use the funds saved in the UGMA/UTMA for college expenses, the child may have other ideas how to spend the money. Unlike UGMA/UTMAs, Section 529 plans are not irrevocable gifts and the taxpayer retains control. Control stays in the hands of the adult responsible for the account. Generally, this is the same person who contributed the money, but it doesn't have to be the case. Someone else, for example, a grandparent, could make the donation but name the child’s parent as the account owner. Money does not come out of the account without permission from the account owner. If the designated beneficiary of the plan decides not to go to school, then the account owner can simply change the beneficiary to someone else in the family.

The AO is the person who, under the terms of the QTP or any contract setting forth the terms under which contributions may be made to an account for the benefit of a designated beneficiary (DB), is entitled to select or change the DB of an account, to designate any person other than the DB to whom funds may be paid from the account, or to receive distributions from the account if no other person who is entitled to receive distributions is designated (Prop Reg § 1.529-1(c), under which taxpayers may rely).