Saving for a grandchild's college - Even though there's no grandkid yet!

HLN Money Expert Clark Howard

DONALD:I want to start saving for college for my grandchild that I do not have. What is the best way?

CLARK:That is great optimism, Donald, because you’ve already decided that your to-be-born grandchild is going to be college material. Love that. Alright, the reality is, with a 529 college savings plan you are not allowed to open an account until there’s someone to name as a beneficiary. But there’s a way around the beneficiary issue.

Here’s how you do it: You can set up a 529 account, college savings plan (tax free) and name yourself as beneficiary of the account you own. Then, when your grandchild is born, you simply change the beneficiary designation to that new bundle of joy, your new grandchild.

[Via http://tips.blogs.cnn.com]