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There are a number of vehicles available for investing funds to pay for relatives' college expenses. There are section 529 plans (QTPs), coverdell education savings accounts, Uniform Transfer to Minor Act accounts (UTMAs), and trusts under sections 2503(b) and (c). Each vehicle has pros and cons.
Currently the most popular are section 529 plans. These plans permit investments to be made in professionaly managed investment accounts that grow tax-free and can be withdrawn tax-free if used to pay for college expenses for the beneficiary of the account. If the funds are not used to pay for college expenses then the earnings are taxable and subject to a penalty. Up to $13,000 (or $65,000 in 1 year if the gift is spread over 5 years) can be contributed annually without having to file a gift tax return.
Coverdell ESAs are similar to 529 plans but they can be invested in a variety of different investments but only $2,000 can be contributed annually to these accounts.
UTMAs can be invested in a variety of different investments but once the child attains age 21 (age varies with the state), then he/she can withdraw the funds for any reason. The earnings do not grow tax-free on these accounts.
Section 2503 trusts are more complicated than the other vehicles and require an attorney to draft the documents. These accounts do not grow tax-free but provisions can be included in the trust to somewhat restrict the child's access to the funds.
Page 78 compares some of these vehicles - http://www.irs.gov/pub/irs-pdf/p970.pdf
529 plan accounts for each of your relatives' sons/daughters would be the best option. You could designate yourself or the parents as the owners of each account and a separate beneficiary on each account. If any of the children (beneficiaries of the accounts) did not do go to college, the accounts could be transferred to other related children.
Depending on your state of residence, you may also be entitled to claim a partial or full state income deduction for the contribution amounts.