If you were to make a non-qualified withdrawal for your son it would be subject to tax on the earnings, but exempt from the additional 10% penalty normally applied to non-qualified withdrawals. Your son would not need to become the account owner to do this. The IRS provides the following guidance in this matter,
"(The 10% additional tax doesn't apply if) Made because the designated beneficiary is disabled. A person is considered to be disabled if he or she shows proof that he or she can't do any substantial gainful activity because of his or her physical or mental condition. A physician must determine that his or her condition can be expected to result in death or to be of long-continued and indefinite duration."
VP, Research & Development
This information does not constitute tax advice and is provided for informational purposes only. Please consult your tax advisor, financial advisor, local taxing authority, and/or plan provider or sponsor for more information.