For the purposes of a 529 plan, only certain relatives are classified as family members by the IRS, and the distinction can be an important one. If an account owner wants to change the beneficiary of their 529 plan, they can do so without penalty, but only so long as the new beneficiary is recognized as a family member from a tax standpoint. Relatives who fall into this classification comprise the following (and their respective spouses):

• A spouse
• A descendant, whether biological or adopted
• A niece or nephew
• A first cousin
• A parent, stepparent, or grandparent
• A father- or mother-in-law
• A sibling
• An aunt or uncle