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First, if you haven't already, do please review this article (paid content). Unfortunately, the grandparent cannot make an additional contribution to the same beneficiary within those five years without incurring gift taxes. However, he can establish another account or accounts with another beneficiary or beneficiaries, including himself, a spouse, or his children, and then change that beneficiary later (after the five years). If it's going to be to a grandchild, he'll want to make their parent(s) the beneficiary, otherwise if he changes beneficiaries across more than one generation there may be tax consequences. You can read this article for more on the ins-and-outs of beneficiary changes.
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.