Unfortunately a prefunded 529 which the child owns is not an ideal solution by itself since there is but ONE custodian.
For all practical purporses there are no custodian police--so if there are misuse or control freak problems we are back to the dual problem.
Two trustees of one trust would solve the control problem within the decree language. We will call Solomon to split tie votes.
I agree, I would run some trial calculations to see if Financial Aid is even realistic in your shoes. It may well be if the assets do not show up with the noncustodial parent.
On the surface if you two 100% fund college education then FA may not seem an important question to any court, and if any excess (due to overfunding or aid or nonparticipation etc) come back pro rata then you EX may not care since she stands to gain little back.
However from the kids standpoint FA may be a big issue if they select a college more expensive than what the initial order required or they go on for advanced degrees etc.
Even if you two put the fund in a two signature taxable account I doubt you can agree on actual investments--bottom line the kids are in for some meager after tax returns.
A 529 at least under current law provides for fully tax free educational distribution for each child and since by law it takes the owner out of the actual investment decision loop it keeps you two sort of out of that stalemate--if you can agree upon a plan.
A 529 not owned by a custodial parent does not appear as a parental asset for FA purposes under FAFSA. The income component of the 529 upon distribution counts as student income against future years aid--a lesser delayed impact.
Ignoring the fafsa form question as to other support, a NON 529 under the noncustodial parents SSN might never appear at all. Howver the recurring tax liability of any income or recognized gain may offset the FA prospects--taxes are a sure thing, FA is not ---and keep in mind that much FA is in the form of loans not grants unless Yale and a selct few school are on your plate.
Quite frankly if I were a judge and you funded or proposed a funding that more benefited the children I would be tempted to either allow a modification of the order or simply not enforce the existing language. Of course that would pose some problems about how to enforce her contributions.
I still think one trust, two trustees, two 529s within the trusts and a funding schedule such that no gift taxes/credits are triggered can be a workable solution.
Given that this meets the intent of the order there should be no reason for her not to go along--or you posture it against her if she refuses.