<p>I've been lurking trying to find a definitive answer thats all encompassing, and have really been coming up short.</p>
<p>Heres the situation, I inherited over 500k (estate is not settled, but do have some funds ie life insurance, but again if a major hidden bill came it, it could all be called back to pay off debt however unlikely that appears) I'm over the age for having to file parent information. I make like zero money probably 4-7k (yearly), and the money of that 500k that is invested (some is sitting in the bank) is simply rolling profits back into the investments, so I'm not actually taking any profit as income before heading back this fall (which would have been reported on the tax return anyway). </p>
<p>Yet, when I filled everything out it said "do you want to report assets" I elected NO, since if they're giving me the option to opt out, I don't have a problem doing so (additionally if they wanted every financial document I have, I'd give it to them).</p>
<p>I guess my question as I posed it to the fasfa customer service today (who told me not to report any of it today as there wasn't a line) with no question with life insurance/estate and an option to not disclose assets, do I have a potential problem? </p>
<p>Again had there been a line that said "if someone died, and you got money how much?" fill in the blank. I'd have listed every penny, but it seems like such a gray area, and so much convoluted information on the topic ranging across the years.</p>
<p>Since the dividents are reported on taxes, then anyone with half-of-a-brain can conclude that there are some assets available to generate those (stocks or mutual fund).</p>
<p>I don’t know if people who designed software for FAFSA have that half-of-a-brain, but if they do, you will be selected for verification and get into a lot of trouble.</p>
<p>My opinion: You should be ashamed for trying to scam your way into need-based financial aid. You are welcome.</p>
<p>I’m with Lerkin-- are you filling out the FASFA because you are required to? Because with that amount of money, you DO NOT need financial aid. Really. Don’t give excuses about potential debt, blah, blah. Life insurance is not touched for the deceased’s debts. Besides, debt is an issue everyone has, it doesn’t make you eligible for financial aid. The fact is that you have a half a million dollars in assets that should be considered available for college costs. My guess is that one of the reasons you were left this money was to make sure that you were able to get a college education. Even if you went to the most expensive school in the country you would only spend half of that money. By hiding that asset, you are misleading the colleges into thinking that you are destitute. It may not be “technically” fraud because there is no specific line for it (and I’m no expert on that), but it is most certainly morally repugnant. If you want to preserve your half million, go to a cheap school, get some merit aid, or get a job. Sorry to sound harsh, but you really should have expected it. Believe me, if a college gave you financial aid and found out about this money afterwards (oh, and they WILL find out), I’m guessing you would lose your aid pronto.</p>
<p>Hmmm…I’m not sure if you have to report your assets or not. If you do, then you will certainly hear about it (your dividends will show up on tax returns as noted). However, if you go to an instate public university, you will spend only a fraction of the money from your inheritance on your college education even as a full pay. I can’t think of a better way to spend that money.</p>
<p>The FASFA form does not require you to disclose your assets if your income (including investment income) is below a certain threshold. I believe the online form will not ask for the data if you are below that income. The Profile form required by many schools will require you to disclose ALL assets. Federal aid is determine by the FASFA data only.</p>
<p>I known it seems unfair to some to get aid in this case but that is how the rules were written. It is also seems unfair that people who brought new cars, vacations, houses, … instaed of saving for college get aid while savers get reduced or no aid. That life.</p>
<p>If you have not received the assets yet, that they are pending clearances and examination, etc, you don’t have to report them. If you are audited, and they come up and are considered in receipt by you, an adjustment would be made. It appears as though this is a technicality. Once you do receive those assets, then you are legally obligated to report them.</p>
<p>We tell people to pay their bills and empty their accounts before sitting down and filing FAFSA. I’ve seen kids get PELL decreased because they have some money sitting in an account earmarked for some bill payment or other. I tell kids who are in that category to pay their parents for living expenses and have the money in an account in a parent’s name so that it is not hit as hard or at all. Students do not have an allowance before the assets are hit. </p>
<p>There is a big difference between smart financial planning and outright fraud. To take out money and stuff it under a mattress or in a safe to avoid reporting it is fraud. To pre pay bills or fill out the FAFSA the day before the pay check hits the account is smart planning. If you have control over some monies coming your way December of your kids’s Junior year, if you are in a window that could be compromised by the funds, better you get the money in January and fill out that FAFSA before it comes rolling into your financial accounts.</p>
<p>My understanding is that you can choose to enter your assets on the FAFSA. If they are not required, they will not be used in the calculation even IF you enter them.</p>
<p>This student is an independent student. I’m not sure if there is a simplified needs test for independent students who are not married and do not have dependents. I hope someone else will chime in.</p>
<p>To follow up on cptofthehouse advice, I would try talking to the executor of the estate to see if you can delay the inheritance until after you file the FAFSA. </p>
<p>As others have stated, life insurance can not be clawed back for estate claims. Your inheritance can be but if the exector does his/her job the risk should be low.</p>
<p>Thanks for the RATIONAL posts guys again it seems some people fail to understand there is nothing wrong with exploring every LEGAL option that one can take advantage of.</p>
<p>Moral superiority is great, but try telling your car lender how great a person you are, or your mortgage lender you run a day care for special needs kids, and don’t have anymore money… They’ll say thats wonderful all while typing up the repo/foreclosure, save the list of moral triumphs for when you are standing in-front of the pearly gates.</p>
<p>cptofthehouse I totally agree, hiding is one thing, not responding to a question when told you answered prior questions truthfully and accurately, absolved you of that is another. lol one of the posters also seems to be unable to grasp that if you made a billion dollars in an investment account until you take that money out you are not required to pay the taxes on it so it wouldn’t show up on a return until such time. Also if it continues to increase in value you win, and if it goes to 0 the next day you lose.</p>
<p>Either way I disclosed it in the asset box where a supervisor told me (who also thought I was crazy for doing so…5th person at fasfa too), and it got successfully changed and EFC and amounts stayed the same lol</p>
<p>Hopefully this thread clears up allot of the confusion for someone else searching the topic.</p>
<p>If you cashed out your inheritance and bought a house that you lived in – or, if rather than cash you had inherited a house of the same value & moved into it — then it wouldn’t be an “asset” for FAFSA purposes. I’m sure there are some smug people passing judgment on you who are happily sitting on large home equities they don’t have to report.</p>
<p>It sounds like you are following the rules and just happen to fit into a loophole that will apply for one year only. Next year all of those dividends will be reported as income, and your FAFSA EFC will be substantially higher.</p>
<p>THumper brings up an important point. When it comes their own money, there are fewer hard and fast rules, and the financial aid office can count money that they “see” coming even if it’s not there. They will follow the scent of the money. SO it is important not to list possibilities. ALso listing something may get counted if the fin aid office of any given school does not catch it as an error.</p>
<p>Until an estate is settled and the funds received, there is no telling how much or when you will get anything. A friend of mine and her siblings have been held up for years in getting anything from the deceased mother’s estate due to some challenges and complications. What they thought would be a nice big amount will not break $5K, and some of the siblings might not outlast the process. So counting ones chickies from the eggs in the nest is not a good idea. It also might be a good idea to deliberately delay the process if the award is worthwhile to you to do so.</p>
<p>Cpte…if the student lists assets on the FAFSA that do not need to be listed, the school does not need to correct the error. FAFSA calculation will just not use those listed assets when doing the calculation.</p>
<p>For Profile schools, very often the tax return is required. $500,000 should earn a bit of interest and that will show up on the tax return.</p>
again it seems some people fail to understand there is nothing wrong with exploring every LEGAL option that one can take advantage of.</p>