1. How would setting up a 529 or ESA plan affect my child/beneficiary’s financial aid eligibility?
About 5.6 percent of the value of your 529 Savings Plan or ESA at the time of your FAFSA application will be calculated into your child’s Expected Family Contribution (EFC), compared to 35% for custodial accounts and your beneficiary’s assets. The EFC affects the amount of need-based financial aid your beneficiary will get; the higher the number, the less financial aid and need-based scholarship money your beneficiary gets. It will not affect the amount you receive from merit-based scholarships.
 

2. Would bankruptcy affect my 529 or ESA plan?
It depends on the state in which you declared bankruptcy and, for 529s, the state plan under which your 529 is created. In most cases, 529 and ESAs plans are completely protected from bankruptcy- and therefore creditors- in the state administering the plan provided that funds contributed and the creation date of the 529 fund is more than 720 days ago. Plans created 365-720 days ago are protected for up to $5,000 per beneficiary, and plans created less than 365 days ago are not protected from bankruptcy. 
 

3. What is my state’s tax treatment for 529 plans? How does my state’s 529 compare to other states’?
Refer to this site for details on how your state handles taxing 529s and what type of plan it offers.
 

4. What company offers the best ESA plan?
Check this list for low-cost Coverdell ESAs.
 

5. Can I have both a Coverdell ESA and a 529 plan for the same beneficiary?
Yes.

6. How much should I save in my 529 Savings Plan?
The amount you need to save depends on where your child aims to attend college and the tuition required. You can use this online tool to determine an estimate of how much you will need to save. The amount you will need to save may shock you, but there are also other ways to save for college. These methods include loans, grants and scholarships. 

7. When should I open a Savings Plan?
You should start saving as soon as possible If you start saving early enough, even a modest weekly or monthly investment can grow to a significant college fund by the time the child matriculates. Keep in mind saving saves a lot of money; paying for college before your child attends definitely costs much less than paying for college afterward.

8. Is there a cost for opening and maintaining an account?
There are programs that have an enrollment fee when an account is opened. However, this fee may be waived depending on the program if it is "officially" employer-sponsored. To maintain the account, programs may also have an annual maintenance fee, which varies in amount and again is waived under certain circumstances.

9. Can a Coverdell Education Savings Account be converted into a 529 account?
Yes. A qualified withdrawal may be taken from an ESA (tax-free) if the money is then placed into a 529 account for the same beneficiary. There is no penalty for this liquidation as long as the assets are placed into a 529 account.

10. Can savings bonds in a child's name be transferred to a 529 account?
Since only cash can be contributed to a 529 plan, the bonds would have to be liquidated. Series EE or I-Bonds purchased after 1989 may be converted tax-free to a 529 plan if the eligibility requirements are met to do so.

11. Can contributions be made to both a Coverdell Education Savings Account and a 529 plan in the same year?
Yes. Contributions may be made to both an Education Savings Account and a 529 plan account in the same year.
 

---