Putting money away for kids?

I also am putting money aside for my kids, and likewise do not want the constraints that come along with a 529. I know it's not "tax optimized", but we are just using normal brokerage accounts. That way they have flexibility when we decide to give them the money/stocks.

To help minimize the capital gains when we do transfer the accounts to the kids, I donate the appreciated stock to church/charity as part of my normal giving. I then re-purchased that same index in the same account, essentially resetting the cost basis

How much money are you thinking about? And does your child have any earned income?

At least with older kids who hold down part-time or summer jobs, one cool option is to deposit as much into a custodial Roth IRA for the child as the child earns, up to the max. Contributions can be withdrawn without penalty for any reason, and up to $10k of earnings can too (under current law) for things like a first-time home purchase. Never mind the ordinary benefit of adding so many years to their potential tax-free growth of earnings if your child grows up to prefer investing over spending!