<p>Hello all. I'm a divorced father and will be the custodial parent applying on the FAFSA. None of the colleges my daughter is applying to require the CSS profile. After researching this for the past few days, I'm going to disclose the 529s that my ex wife owns with daughter as beneficiary (I'm a "successor participant" on the 529 - don't own the 529 but if my ex dies I take it over, etc). Anyway, since the FAFSA app. only has that one box (#89) that covers the sum total of my investments, I just want to make sure that FAFSA knows I'm claiming the 529s because my whole motive for doing so is to make sure that when my daughter draws money out of the 529 next year and puts that on next year's FAFSA app., that we are evaluated on the kinder scale of the parents' assets rather than the student's income. Hopefully I've made this clear. Thanks in advance.</p>
<p>
So are you claiming that 529 belongs to you?</p>
<p>I don’t know if you could do that?</p>
<p>I’m not trying to claim it’s mine in some unethical way. I’m disclosing that the 529 exists in the same manner that a 529 owned by a grandparent exists because these third-party 529s are what trip up parents who don’t report them as assets on FAFSA and then are faced with having to report any distribution of funds as student non-tax income the following year when funds get pulled out of the 529s.</p>
<p>I don’t think you can report assets of someone else (includes noncustodial parent) on the FSFSA #89.</p>
<p>Even though you done that, I think you still have to report any distribution as student non-tax income.</p>
<p>See page 20 of Application and Verification Guide 2012–2013
</p>
<p>Grandparent-owned 529s are not reported on FAFSA. Along the same lines, your ex-wife is not considered a parent for Federal student aid purposes. Only you (and your current spouse, if you have remarried) are considered a parent on the FAFSA. As such, any 529s owned by your ex-wife are not reported on your daughters FAFSA. It would be incorrect to do so. Even if you were to report your ex-wife’s 529s, you’d still have to report withdrawals from it as untaxed student income on the next year’s FAFSA. So you can’t get around the latter issue next year (higher student income) by artificially inflating your assets this year.</p>
<p>Have you talk the provider of your ex-wife’s 529?</p>
<p>Can they transfer the ownership from your ex-wife to your daughter?</p>
<p>See <a href=“http://www.bankrate.com/finance/college-finance/transfer-grandparent-s-529-to-parent.aspx[/url]”>http://www.bankrate.com/finance/college-finance/transfer-grandparent-s-529-to-parent.aspx</a></p>
<p>This doesn’t seem right to me. I’m not trying to get around anything - and I don’t see how padding my assets would be of any benefit. I was trying to be upfront about the existence of a 529 that is solely for the purpose of pay for college costs. I’m not remarried, it’s just me. The 529 was established when my ex and I were together (she just randomly put down herself as the owner at the time naming our daughter as beneficiary - and I’m named as the successor if she were to die, etc.). </p>
<p>The CSS requires you to put down all 529s that list the student as beneficiary regardless of who owns the 529. Why would the FAFSA be set up so that I am precluded from trying to be upfront about the 529?</p>
<p>This makes no sense. </p>
<p>But if it is so, then I have no choice but to have my ex be the one to apply to FAFSA.</p>
<p>It is so because you don’t own it and have no control over it so your exwife could, at any moment, change the beneficiary. </p>
<p>Don’t worry: most schools that use only the FAFSA don’t meet need so it is unlikely to make much of a difference.</p>
<p>There are specific criteria used to determine who the custodial parent is for FAFSA, so you can’t randomly switch and have your wife file if she’s not the FAFSA custodial parent. Who did your daughter live with most in 2012? That’s the parent who must file.</p>