While there are many different options available to help save for a college education, 529 plans continue to be one of the most popular options. Below is some must-know information for anyone considering a 529.

1. You can change the beneficiary.
Provided the new beneficiary is a member of the original beneficiary's family—for example, a sibling or even a parent—the new beneficiary can use the funds in the 529 account for educational purposes without a tax penalty.

2. 529 Assets have a lower impact on need-based financial aid than some other college investments.
Similar to a Coverdell ESA, the money in a 529 account, if owned by someone who is not the beneficiary (such as the beneficiary's parents), has a much lower impact on need-based financial aid than student-owned assets do.

3. You do not have to stay in-state.
You may wish to invest in your state's 529 plan, but if other states offer better plans, your state's tax break is weak, or your state provides a tax break on investing in other states' 529 plans, it may pay to shop around.

4. You can invest $70,000 (or $140,000 jointly with your spouse) in a lump sum.
If you make a contribution of this size to a beneficiary's plan, you can elect to treat the contribution as having been made over a five-calendar-year period for gift-tax purposes. This allows you to accelerate the transfer of money out of your estate, which could be beneficial from an estate-tax perspective.

5. Know the rules when using 529 funds for nonqualified expenses.
Tax consequences and penalties make pulling money out of a 529 inadvisable. However, in an emergency situation doing so is an option if there are no better alternatives.

6. You can invest in more than one type of college-savings vehicle.
Given that 529s can only be used to cover higher education expenses, a family may want to set up a Coverdell ESA because it allows the funds to be used for both primary and secondary education. If they find that the Coverdell's annual contribution limit of $2,000 per beneficiary is insufficient to fund all education expenses, they can still open a 529 and direct contributions to both plans.