I have about $40,000 in my checking account right now (zero in savings), but the money I have is from my mom’s life insurance and most of it is going towards her tax debt, and probate for our house. Can I/Should I write an appeal for FAFSA to disregard that money when making an award offer for the fall and just base it on my income? Come the fall, I’m not going to have hardly any of the money I have now.
Did you already file FAFSA? Do you live with your other parent or are you an independent student?
@BrownParent I submitted it before the March 2nd deadline so that I would hopefully qualify for cal grant. I can still correct it though. I’m independent so it’s me and my younger sister (18) in the house.
Didn’t you qualify for simplified NEEDS? Simplified needs gives you a 0 EFC. I know a foster kid last year who applied with that amount of assets and the simplified means test meant that the assets didn’t count. She got full cal grant and full aid at UCs. She also got full packages at some selective colleges, where other colleges expected 20 pct of the assets to be used–those were all schools that also used CSS Profile.
@BrownParent I’ve never heard of simplified means or a test regarding it? My income last year was about $3500 so maybe that’s why? I’m gonna do some research on that test, do you have any info on it?
The “simplified needs test” is part of the FAFSA. If your income is below a certain figure, your assets aren’t considered.
Go back to your FAFSA, and see what numbers you have put in and where. For example, if you put the insurance money as income, that could be messing things up.
@happymomof1 I think I answered a question about filing 1040 vs 1040z vs 1040a wrong (or incompletely) I put “I don’t know” because I had no clue, and I just transferred my taxes from the IRS since it’s finally on their database and was able to do it, and it filled the question in as “yes.” That’s question 34 in the financial part, if you were wondering.
Yes that tax form is key.
@brownparent @happymomof1 Yeah, it let me skip over it with the corrections, but on the page to submit it this is what it looks like (left column is “pre response” and right column is “current response”)
It doesn’t look like it changed my responses except for the “do you want to skip assets?” question.
http:// i m g u r .com/j0Rm05g
(^^ remove spaces) Does that mean it is going to skip them but it just keeps the previous responses? And since they are “skipped” there is just no current response for them?
(I think I just made sense of it myself, but will still post for hopeful reassurance.)
I thought that independent students don’t have the same options for simplified means testing.
Btw…you don’t “appeal to FAFSA”. FAFSA is just a form. You may be able to ask for Professional Judgement from a FA officer at the school. Why not pay those debts now?
And why didn’t you put that money in your sister’s acct before filing FAFSA??? It would seem that that would have been the easiest option since it really isn’t “your money” since it’s from mom’s insurance and is owed towards your mom’s bills.
The independent student simplified formula qualifications are on page 5 of the formula guide:
http://ifap.ed.gov/efcformulaguide/attachments/090214EFCFormulaGuide1516.pdf
kristy, that link explains everything there is to know about how the fafsa formula works. If you filed a 1040ez or 1040a then your assets don’t count toward your efc if your income was less than $50k. You can work through the formula manually if you want.
Just for clarification, independent students without dependents other than a spouse can’t get an auto 0 but they can get the simplified formula.
If OP was the death beneficiary of her mom’s life insurance policy, than it is indeed “her money,” and it isn’t owed towards her mom’s bills.
To the OP…was your mom’s estate settled? Why would yo be responsible for her debt if the estate has been settled? This should have been paid.
Were you the guarantor for your mom’s medical bills? If not, these bills might not be your responsibility. Are you working with an estate attorney with regards to probate, and any outstanding debts?
Yes, make sure you are legally responsible for any bills you pay. Organizations may attempt to bill you or get you to pay but that doesn’t mean you are responsible for the bills. Get some legal advice before paying any bills.
The debt isn’t for medical bills, it’s for:
““but the money I have is from my mom’s life insurance and most of it is going towards her tax debt, and probate for our house.””
Anyway…if you can’t get your EFC adjusted because of this, then ask the school if you can delay enrollment for a year, and then this issue will go away.
Why would OP be responsible for her deceased mother’s tax debt? If OP was the death beneficiary of her mother’s life insurance policy, she is not obligated to spend that money on someone else’s tax debt, or even on probate costs. Those expenses should be born by the estate.
Edited to add: if the estate was the life insurance beneficiary, than the life insurance proceeds should not have been placed in OP’s personal bank account, and they should not count as a FAFSA reportable asset - the money would belong to the estate and would not be available for OP’s education expenses.
And no assets would have been distributed to the heirs before the outstanding tax liabilities of the estate have been resolved- income tax for the months that the Mom was alive and getting a paycheck, state and federal taxes, property taxes accrued on the house before it can be passed down to the kids, etc.
OP- you need a lawyer.
@middkid86 @blossom my mom didn’t have an estate. There was no will and no money left behind other than the life insurance which my sister and I were both to receive 1/2 of. The only thing going through probate is my moms house, I have a probate lawyer. I’m 20, so I really don’t have a clue what I’m doing.
@thumper1 @mom2collegekids We had health insurance at the time, but I have been told I still am responsible for the out of pocket medical bills from the hospital. She passed in October, so everything is still happening and hasn’t all been settled.
Everyone who dies has an “estate,” which in this context is a legal term. The estate includes everything the decedent owned at the time of death. The house that your mom presumably owned and all of her personal possessions are part of her estate. It’s good that you have a probate lawyer. Ask the lawyer why you are supposedly responsible for your mom’s unpaid medical bills. That doesn’t sound right, unless you somehow formally agreed to be responsible for that debt.
@middkidd86 thank you for the advice! I will definitely be bringing it up with the lawyer the next time I see them.
Also, when I “corrected” my fafsa I found out that I did in fact file a 1040ez and my income was less than $4000 so I didn’t have to report the money in my account which took my efc from 5400-ish to 0.