When I first started setting up 529 college savings plans for my kids, I was advised to establish all funds in my oldest child’s name, so I could then “roll down” unused amounts to other children. I’m not sure if that advice was bogus or whether the law changed. The current IRS code provisions don’t appear to contain any provision that says the money must be rolled down to a younger sibling. The transferee just needs to be a “member of the family” of the designated beneficiary.

The phrase “member of the family,” incidentally, includes a laundry list of relatives:

Son, daughter or descendant of either;
Stepson or stepdaughter;
Brother, sister, stepbrother or stepsister;
Father, mother, or ancestor of either father or mother;
Stepfather or stepmother;
Cousin;
Son or daughter of a brother or sister;
Brother or sister of the father or mother;
Son-in-law; daughter-in-law; father-in-law; mother-in-law; brother-in-law; or sister-in-law;
Spouse of a designated beneficiary who is described above.

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