<p>My mother passed away when i was a child and left me a sum of money that I guess has been gaining interest over the years. The Problem Is that supposedly I file the taxes on said money independent(My grandparents were financial guardians and they left me in the dark most of the time). The Problem comes with Filing for financial aid because I'm afraid i'll be denied because I have this money waiting for me to turn 18 in order to receive it but it won't be enough money to fully pay for college.</p>
<p>Any help please i'm starting to stress out...</p>
<p>You should find out how the funds are kept, particularly in whose name. If in your name, they’ll need to be reported as your assets. If a UTMA account, they’ll need to be reported in your name.</p>
<p>If it is a UTMA account, an option might be transferring the funds to a 529 college savings account. While still in your name, FAFSA shows those accounts as assets of the Parent/Guardian> Parents have an asset protection allowance, and assets above the allowance are assessed at a much lower rate than student assets.</p>
<p>I believe there stored in CD accounts and they are in my name. The Taxes are done in my name by my financial aid.</p>
<p>OK-- if CD’s in your name, you’d have to report them as your asset on FAFSA. Or you can move them to a 529, and that will give them better treatment, financial-aid-wise.</p>
<p>You should take a look at your tax returns, and also find out exactly how much you’ve got. Time to take control of your finances.</p>
<p>The full amount of your nest egg will not be tapped for college by the schools. Student assets are assessed at 20% (I think) while parental assets are 5.6%. Also parents have an asset protection but students do not. </p>
<p>But think of it this way…your mom left you a wonderful gift. She left you a way to partially fund your college education, and that education is a legacy that you can carry with you forever. I know it might be nice to have that money for another purpose…but it’s there.</p>
<p>As an example…if you had $10,000…the first year, you would be expected to use $2000 (20%). That would leave $8000…so the second year, you would be expected to contribute $1600 leaving $6400. So the third year, you would contribute $1280…</p>
<p>I believe this is an accurate way to look at it.</p>
<p>Thanks and were in the transition period to me being in charge of all my finances.</p>