<p>I opened a UGMA for my daughter with $30K that consisted solely of life insurance proceeds after her father's death. I have never co-mingled it with other funds. As of today, it stands at $29K. She turns 18 this summer, right before she goes off to college. I know that a UGMA is classified as HER asset for FAFSA purposes, however, since it is non-taxable insurance proceeds initially, do I have to report it?</p>
<p>Yes. It is an asset and must be reported. The original source does not matter.</p>
<p>Schools will often make an adjustment to insure insurance proceeds as income, but the asset still has to be reported.</p>
<p>Ok. Here’s a bigger question: We are also fortunate to have $$ in an American Century Giftrust. It was set up by grandparents when she was born and will not terminate until her 25th birthday. Any taxes due on the money it has earned are paid by the Giftrust. Unlike the UGMA (which we will obviously use to pay for that first year of college), this money can’t be touched for another 8 years. Do I report it on the FAFSA and how ?</p>
<p>Trusts must be reported as assets. The fact that she can’t access it does not make a difference. The exception is certain restricted trusts related to accidents and medical.</p>
<p>If the UTMA is to be used for school, see if it can be converted into a UTMA 529 account. Those are reported as parent assets and have a much smaller impact than student assets (a maximum of 5.6% as opposed to 20%)</p>
<p>If you’re referring to the UGMA when you say UTMA, it’s probably too late to convert since this is her senior year. I was told that you can’t do that simultaneously with filling out a FAFSA.</p>
<p>Anybody know if the Giftrust is reported as child’s asset or parent’s asset?</p>
<p>You can convert a UGMA to a UGMA/529 at any point. If you do the conversion before you start your FAFSA filing, it will be reported as a parent asset for that year. If you’ve already started filling out the FAFSA for 2013 then it’s too late for this year but can still be done for the 2014 FAFSA if you want.</p>
<p>Whose SSN is on the Giftrust? It looks like since the student is the beneficiary, it should be reported as a student asset even though she can’t touch the money until she’s 25.</p>
<p>Yes, it is the child’s asset. </p>
<p>The *only *exception where a child’s asset can be reported as the parent asset is a UGMA 529 account. As vballmom said, I have never heard any restriction on when you can convert a UGMA.</p>
<p>The trust’s EIN is on the Giftrust.</p>