<p>My wife is a beneficiary of a family trust that is claimed by our accountant annually on our 1040 which increases our AGI by about $40-60K annually. However this is strictly a business trust controlled by a trustee and has never made any disbursements nor has any intention of doing so in the future. I provided a letter to the financial aid office at my son's previous school from the trustee which they accepted and based his financial aid on our actual annual income however the financial aid office at his new school will not accept this as sufficient evidence that we do not receive any monies and never have. I have offered to provide bank statements but they insist that they must go by our 1040 reported AGI as the basis for their judgement. Do I have any recourse as I am currently unemployed and will not be able to enroll him?</p>
<p>* However this is strictly a business trust controlled by a trustee and has never made any disbursements nor has any intention of doing so in the future.*</p>
<p>Never any money in the future? Your wife is NEVER going to get any money from this EVER? If so, can she “give away” her share?</p>
<p>However, if at some point, your wife will realize some financial benefit, then that’s why the school is including this money.</p>
<p>How can someone be a “beneficiary” and not ever have any access to the money - EVER???</p>
<p>;)</p>
<p>I looked in my magic 8 ball & it said * doubtful*</p>
<p>I assume this is a college?
Are both schools FAFSA only schools or what is the difference between them?</p>
<p>Throwing off $40-$60K to AGI annually, that trust sounds like quite an asset. If it’s counted towards AGI, it is actual annual income - it’s the rise in value of her share of the trust. </p>
<p>It’s hard to see why any college wouldn’t go after those savings. Her share of the principal alone is probably enough to make you full pay anywhere.</p>
<p>The use of professional judgment is on a case by case basis and whether or not to even DO this is left up to the individual schools.</p>
<p>Trusts MUST be reported. While they haven’t made any disbursements up to now, the reality is that ANY trust can be dissolved and the assets disbursed to the beneficiaries. This provisions of this are usually within the trust document AND are also found in state guidelines for the setting up and dissolving of trusts.</p>
<p>Has your son withdrawn from his previous school already…and did he do so without knowing what his financial situation would be at school #2? Is he able to stay at the school where this trust has been excluded by use of professional judgment?</p>
<p>So you pay taxes on an extra $60K/year and receive no money at all and never expect to? Very weird…what exactly is the point of keeping her share in the trust?</p>
<p>I think we need some clarification.</p>
<p>I don’t believe that there will NEVER be any disbursement in the future. If that were true, the wife might as well “donate” her share to a charity and let them figure it all out.</p>
<p>Obviously they’re not paying taxes on $40-60k income/year for a worthless asset.</p>
<p>OP, stick with the school that accepted the letter from the trustee. It’s not going to get better than that.</p>