<p>So on the finaid and any other forms your child reads you are going to say you are not married? What message does that send your children?</p>
<p>Again, I cite live-in relationships, some of which can go on for decades without any legal formalization (and not all states provide for commonlaw marriage). Tax fraud is illegal; what would be illegal about a couple deciding that they don't want to be married any more, even if they still want to remain together? People get married or not for several reasons; they also get divorced or not for several reasons. What makes a divorce for financial reasons inherently fraudulent?</p>
<p>kayf: I'm certainly not married yet, but if my parents decided to get divorced because they didn't want to be married any more, for whatever reason, my response would be, "Hmm, interesting. Can you explain the benefits of divorce in this situation, so that I better understand the intricacies of American law?" The legal status of my parents' relationship would be, frankly, irrelevant.</p>
<p>Of course, I'm atheist and my parents were at least raised agnostic (mother is a converted Christian but doesn't place any religious significance on marriage). Obviously I have no morals.</p>
<p>Biblical morals don't play a real role in this issues, keil...so your lack of any religion really doesn't matter. A couple who choses to live together without the marriage license isn't trying to defraud anyone. A couple who choses to divorce just for the financial benefits but physically reside in the same home while maintaining a separate domicile for "looks" is defrauding the system. Divorcing to reduce one's household income to receive additional financial aid is fraud. Divorcing because you have unresolvable problems or because there is no love left in the relationship is a totally different issue. But typically, couples who divorce for these reasons don't continue to live in the same household. Basically, it isn't the divorce itself that is fraudulent, it is the reasoning behind the divorce that creates or remove the fraud from the situation.</p>
<p>Let me play devil's advocate here. </p>
<p>Let's say I have been married to Harold for 20 years and he sometimes drives me nuts but it's an okay marriage. We have one child who will be going to college. I run the FAFSA calculators and realize that if I were not married to Harold, that the EFC would be 10K, not $50K. As I realize this, some additional financial concerns arise (Harold likes his credit cards and I do not and we have some fundamental disagreements over their use). I decide to divorce Harold because I want to be financially free of his spendthrift ways, since we have some joint accounts and whatnot. Harold and I continue to live together. Since we have not shared a bedroom for ten years due to his being a nightowl and my being someone who is in bed at 8 PM, we are not sharing a bedroom nor a checking account. </p>
<p>Our child files a FAFSA based on my income, and receives some grant money. We file taxes and pay taxes due promptly, and file our legal statuses. (Note: we would be paying higher taxes as Harold has to file single.)</p>
<p>Harold and I share a home. We eat dinner together, shop for groceries, visit our child at college.</p>
<p>Where is the fraud?</p>
<p>NikkiiL: So if a couple marries, they aren't legally allowed to revert to the unmarried live-in relationship without committing fraud? "Unresolvable problems" is extremely vague and could easily be argued to include unreconciliable financial issues--e.g. one parent refusing to pay for college expenses.</p>
<p>Just out of curiousity, even if a divorce were amicable, do you have any idea how much paperwork there is? Would you divide up property, pensions, etc how you would if it were a real divorce? If not, what if advantaged spouse decides a year later, oh, I really want a divorce? And that spouse has the house and pension?</p>
<p>Paperwork is a price many would gladly pay in return for the not-insignificant financial benefits. I agree, fair divisions of property would be necessary in order to hedge against a "real" divorce. But if the couple is willing to jump through the legal hoops, I don't see what is so immoral or wrong about it all.</p>
<p>Quite honestly, if both parents were married then divorced but were still living at the same address, we would require both tax returns and reduce aid based on Institutional Methodology...so you would only get the loans you would have received without having committed fraud. Divorcing to reap financial aid benefits is fraud.</p>
<p>One parent refusing to pay for college experences and it results in a divorce? Then why would the one initiating the divorce want the other around?? I'm sorry, that wouldn't be unreconciliable differences and we would use IM and adjust the financial aid based on the appearance of fraudulent filings. Just as refusal to pay for college expenses isn't a valid reason to be given independent status for financial aid purposes, a parent's refusal to pay while remaining in the household isn't sufficient to prevent a college from adding the earnings back into the calculation...we may not be able to change the FAFSA, but definately can change the institutional aid. Also, if an FA Counselor suspects fraud has occurred, we have the legal right to refuse to dispense federal aid to the student as well.</p>
<p>Keil, maybe I was not explicit enough. Dividing up property is difficult for couples who have been married a number of years. Would you propose the house be transferred to joint name (inf not in joint name already)? You would have to get permission of any lenders if a mortgage. With all due respect, if you havent gone through a divorce as reasonably well off adult (not college age), I dont think you can appreciate intiricacies. Will there be child support? Are there younger children? And the lurking fear, what if after all this is put in place, one spouse decideds he/she wants divorce. </p>
<p>yes, I think it would be wrong. But I also think you underestimate logistics. By a country mile.</p>
<p>Keil,</p>
<p>What I am trying to say is this. "Divorcing" spouses could negotiate as if it were real and it will take a long time. Or they can just wink, wink and say trust me. But if something then goes wrong, it could be a disaster especially for spouse without much income (which is the only reason why anyone would do this).</p>
<p>and can only say that I am thankful I do not have to resort to something so complicated in order for my child to attend college.</p>
<p>NikkiiL, the OP's original hypothetical was based on FAFSA only. Anyway, I defer to your FA expertise, and would like to pose this question: if a student's parents were unmarried (i.e. had never been married) and one parent maintained a separate household but still often lived with the other parent, would you require consideration of both? I believe FAFSA rules are that the custodial parent is whomever you live with the most--that's six months and a day. And I know of married couples who maintain separate households, for various reasons (e.g. work).</p>
<p>kayf: Joint house. Separate banking accounts, much as many married couples already have. Choices involving the kids are not any more logistically difficult than in a prenup, since both spouses are (obviously) amicable. It requires effort, yes, and probably the help of a lawyer; but if it were legal (or, let's be realistic, even quasi-legal), I think a lot of people in specific situations would be willing to jump through the hoops.</p>
<p>The "wink wink" trust is a terrible idea and would remain the fault of the party who agreed to it in the first place. I don't understand why anyone gets married without a prenuptial agreement these days--it's relatively inexpensive for the peace of mind.</p>
<p>Even a FASFA only school has the right to use IM for its institutional aid and even FAFSA only schools can refuse to process federal aid or award institutional aid if they believe fraud has occurred. We have done this in our office (for other fraudulent reasons) and we are a FAFSA only school. In fact, I have one now that fraudulently completed her school application, stating she had never attended college anywhere else. She thought that by hiding her previous college education (and loans), she would get more money from us. Now, she isn't getting anything.</p>
<p>The rules regarding parents who have never married (in a state that doesn't recongnize common law marriage) are much different, and, for federal aid, require a different set of standards. Students aren't penalized on their federal eligibility because their parents chose to never marry each other.</p>
<p>Also....in a situation like this, with Federal regulations, if both parents are residing in the same household, the child is considered to be living with each parent 50% of the year. When a child doesn't live with one parent at least 51% of the time, then the parent who makes the most money is considered the custodial parent. One cannot pick which parent to use, thus chosing the lowest wage-earner. FAFSA rules are quire clear about this issue.</p>
<p>NikkiL,</p>
<p>Why is it that parents who did choose to marry ARE penalized on their federal eligibility? Why, with married biological parents who live together, does my child apply with both parents' incomes; but the child next door, whose parents never married but always have lived together apply with just one income?</p>
<p>Keil,</p>
<p>Most 50 YOs on first marriage dont have prenups. That is why dividing up eveything is tough. Keil, my X and I did have seperate households becuz of work, but guess what, we still had pensions, vacation homes, principal residence, pensions, child support issues, yadaya yad.</p>
<p>Because that is the way Congress wrote the regulations. Is it fair? Not in my opinion...but I didn't get to help write the legislation. I believe that if the parents are residing together, both incomes should be counted on the FAFSA. As I recommend to my students who don't like the federal regulations....complain to Congress...maybe if enough parents/students complain to their Congressional representation, some unfairness might be reduced.</p>
<p>Well, technically you can pick who to use as the custodial parent; you just have to actually maintain separate households and have one parent be away 51% of the time. I believe there was a thread about that issue a while ago, with amicably divorced parents who split custody and were told that FAFSA FA would be much better if they reallocated the split.</p>
<p>kayf: I know most couples wouldn't have prenups; but the situation isn't much different from initially establishing a prenup. At this point the couple is amicable and inclined to play fair, so how is actually dividing assets different from planning the future division of assets?</p>
<p>Keil, I think you are ignoring economics. What if Dad doesnt work, and doesnt earn much, so for FAFSA, you want to give him custody. Then he says, OK , I want child support of 2,000 per month. Mom says, too much try 500. Then Dad says OK, we do better on FAFSA, then mom says hasta la vista. </p>
<p>Its one thing when parents are actually divorced. But when it is a phony divorce, its not so easy.</p>
<p>Its incredible, on another CC board I am getting attacked for trying to find a laundry service for my D, and here people want phony divorces. I guess its time for me to leave.</p>
<p>If you read my entire posting, Keil, I specifically stated that both parents lived in the same home. For parents who legitimately reside in separate homes, if the child splits his/her time evenly, then the higher wage earner is considered custodial. Of course, the parents can decide in this situation to prevent the split from being even, but realistically, if the parents are truly maintaining separate households, the child is more than likely already residing with one parent more than 50% of the year....365 days divided by 2 = 182.5.</p>
<p>Speaking of fraud. Is is fraudulent when trying to decrease your EFC to get better FA, you cut your working hours so that your income is lower? Is it fraudulent to spend down your savings and buy that car or computer or flat screen TV so that you don't have much of a savings. Are we talking apples and oranges?</p>
<p>Quite honestly this is no different than getting that divorce to have a better financial advantage.</p>