No, only 100% of the account funds needs to be reported. The funds are jointly owned. I am unfamiliar with financial aid documents, but so long as the total value of the account is reported OP should be okay. Doesn’t seem that custody is relevant as assets of both parents & of the student would be relevant for any decision regarding financial aid.
Again, I am not familiar with the financial aid forms, but it seems only fair & reasonable that assets of both parents are considered whether currently a custodial parent or not.
Yes, your unfamiliarity with financial aid forms is evident. Student assets are typically assessed at a higher rate than parent assets. And for FAFSA, the most widely used need-based financial aid form, the income and assets of a non-custodial parent are not reported.
FAFSA has its definitions, IRS has its definitions, banking has definitions. They may or may not be the same. For example, the IRS and FAFSA have different definitions for ‘dependent.’ You still have to report income on the FAFSA as it appears on the tax forms (where you entered it according to the IRS definitions), but you don’t get to use the IRS definition to claim you are independent on FAFSA. FAFSA asks about cash assets, but doesn’t ask where those assets are located, so if the OP thinks the money is his, he needs to report it as his. The bank isn’t going to look at it the same way.
The joint owner of a property doesn’t have to report the entire asset. Legally, the parent may have the right to fully use the beach house owned by 4 different people, but that doesn’t mean he reports the full value on financial aid forms.
Custody (of the child, not of the account) is relevant here as the non-custodial parent’s assets are not reported on the FAFSA.
@Publisher I believe this case is a non issue. It’s a non custodial parent and an account of convenience. They are not spouses.
He is not adding to or using the assets. I would simply have my name removed ASAP. Open a new account with mom and put in an insignificant amount that covers the usage for the student. Imho.
Real estate is trickier and it involves net equity involved and it is not usually owned as jwros with multiple parties and is not a good comparison. Or it shouldn’t be. Your piece of the real estate asset not owned as a joint asset is separately transferable at death, probate eligible, part of your taxable estate in most cases.
This is why I always advise clients who wish to have bank accounts go to a certain person consider totten trusts or POD as an alternative to adding them to your account- unless there is a valid reason to need a co owner. Better to consider a POA for day to day help versus hoping the sibling will remember your wishes to divide to your siblings. Also this can be considered a taxable gift at that time for the sibling involved. As mentioned be careful with non spousal additions to bank accounts and real estate to be mindful of gift tax implications.
If there’s 10k in that account they “share,” but it’s all mom’s, you don’t report 10k assets to mom and then 10k to the kid, just because both names are there.
Update. I spoke with a financial aid counselor at my school, and I spoke with someone at the Federal Student Aid office. They told me that I did not make a mistake because I reported 100% of the money that was mine, and since none of the money on the joint account was mine, I did not need to report it. Thanks for all the help guys.