Type of savings/educational account for nieces (in USA)
Situation: I am earning decent money, and would like to put some away for my two nieces. What is the most advantageous account (for the kids) to do this. One niece is four years old, one niece is 6 months.
The 6 month old is my sisters first child. The four year old is my brother-in-laws child from a previous relationship. The mother has primary custody of her, but my sister is trying to get primary custody. I don't want the four year old's mother to have access to the money. Other than that I intend to treat both children equally. I am also located in a different state than my sister and her children.
My sister and brother in-law are generally frugal with money (compared to general population), but also don't have a lot of it and haven't started an educational fund (529/coverdell)/IRA etc. for either child. I would be willing to give them the seed money to start one of these accounts if need be, but I am not sure what type of account to start. My sister doesn't know what type of account she would like either.
I was originally thinking an educational type account, but am also open to the possibility that they might not want to go to college, and an IRA or investment account might be more useful. That being said, my brother in law dropped out of college because his family couldn't afford it and I don't want that to be a problem for my nieces. I don't want to put an educational account in my name because of how it would effect financial aid, but could be convinced otherwise. All recommendations would be researched before implemented. I would also be willing to look at outside resources if anyone know of some good ones.
What type of account would you recommend?