Here is the crash course on the basics of 529 plans.

Anyone can open a 529 account. Parents, grandparents, generous friends -- any of them can fund a 529 on behalf of nearly any child, regardless of income. To qualify for a deduction on your contribution, you have to live in the state that's offering the plan. (Some states limit the deduction to the person who opens the account.)

You can also open more than one account in a single state for the same child. Adults who intend to return to college can take advantage of 529s too, although some states have age restrictions. You can even open an account on your own behalf in many states.

Most college costs count as "qualified" withdrawals. You can spend 529 money on tuition, fees, books and supplies at any accredited, degree-granting college in the country, whether private or public, undergraduate or graduate.

In most cases, you can use the money for room and board as long as the student is enrolled on at least a half-time basis. If your child has disabilities, you can tap a 529 for special-needs equipment or tutoring.

You can switch funds or even move to another 529 plan. Under IRS rules, you can reallocate investments within a plan -- but only once a year. (That's one reason age-based funds, which shift the allocations automatically, are so popular.)

You can also move your money into a new plan once a year. Some programs may charge a fee, and a few impose a minimum holding period -- New Mexico, for example, has a one-year waiting period for rollovers. Plus, some states, including Colorado and Nebraska, tax rollovers to out-of-state 529 plans in order to recapture the tax breaks you've already received.

If your child doesn't go to college or doesn't need the money, you won't lose it. You can get a full refund, but you'll pay taxes plus a 10 percent penalty on your investment earnings. If your child becomes disabled or dies, the plan will waive penalties. In the lucky event that your child receives a scholarship, it will waive penalties on withdrawals up to the scholarship amount.

An alternative would be to leave the money in the account as long as the state permits -- perhaps your child will go to school, or graduate school, later. You can change the plan beneficiary as long as you select a "member of the family," which means you could pay tuition for a sibling, step-sibling, cousin or aunt.