<p>My mom and I are going to college and receiving full financial aid right now. My family has 4 people, our income is about $16,000/year. Recently aunt wants to put my mom's name or me under the house title and passes the house for my mom or me (when my aunt passes away). However, my aunt's husband says that this home-ownership will affect our financial aid benefits since the house value is about $320,000. </p>
<p>This is my first year in college and I am thinking about transferring to 4-year university. Will this home-ownership affect my financial aid benefits? Will the FAFSA application require the value of the house? Will the EFC increase with the house's value? </p>
<p>Thank you so much!</p>
<p>Fads a does not include the value of a primary ride cue but there have been some disagreements on cc about whether an inheritance counts as both income and asset in the year of the inheritance. In the worst case scenario, you could take a year off of college during the inheritance year.</p>
<p>FAFSA doesn’t consider the value of your home if you are living in it. If you don’t live there, it is considered an asset, and your share of that home would be treated as an investment. This could raise your EFC significantly. Print out the formula, and work through it on paper to see what your numbers would be like: <a href=“http://ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pd[/url]”>http://ifap.ed.gov/efcformulaguide/attachments/091312EFCFormulaGuide1314.pd</a></p>
<p>If the house title is transferred to you while your aunt is still alive, it isn’t an inheritance issue but a gift, and that is where it can become a problem. Once you have the house in your name, for FAFSA purposes, it would not be considered an asset if it is considered your primary residence. As Happymomof1 states, if you are not living there, it is an investment, and yes, it would be an asset and would raise your EFC.</p>
<p>Also, if you transfer to a school that uses PROFILE or also asks about home equity, it can affect your financial aid.</p>
<p>However, financial aid is not the be all and end all of financial planning. Your family needs to come up with a estate planning session with an attorney who is knowledgeable about these things and discuss the best way to handle this. It is very possible that if you do not get the house transferred into your names while your aunt is alive you won’t get it at all. Our friends had (and still have) a toxic situation where the husband of a grandmom decided not to abide with the terms of the will, and in that state, as in most states, you can’t cut hubby out of more than 2/3 of the assets without a prenup or other legal document. No can do, if the spouse objects. So you need to take a whole world perspective of this situation, and only someone well versed in those intricacies can cover those matters. It will be well worth the fee for aunty, you and mom to have a sit down and discuss this.</p>
<p>I understood the house would change names when your aunt dies but cpt is right: there may be good reasons to do it differently. You should consult an attorney, however, because gifting it may also inadvertently trigger a gift tax.</p>
<p>Really, you, your mother and aunt NEED to see someone who knows how these things work in the big picture. None of us here can advise you properly and it can make a big difference on how things can work for you and your mother for many years to come.</p>
<p>Thank you guys… We are looking for someone to help us understand thoroughly about this problem.</p>
<p>Well, I deal with estate planning, etc. on a regular basis in my financial planning practice and there are many techniques used in passing a real property along to whomever. The goal of the giver and also the needs of the receiver need to be better laid out in order to give any informed advise or insight on this one. Estate planning techniques, such at a Qualified Personal Residence Trust or other plan can be used to reach the end goal of the owner of the residence, depending on WHY they want to get the trust out of their estate.</p>
<p>Anyhow, with more details on this you might get some ideas, but the advice so far is right on : 1. YES, how this is done could impact your financial aid (or could not, again, depending on HOW it’s done) . 2. Your aunt, you and your mother need to discuss this with a planning professional who knows his or her craft. Few attorneys will know the details of college financial aid though, so maybe an attorney and financial advisor who knows college aid.</p>
<p>Good luck. post more details if you’d like more direction on this.</p>