<p>Not getting into the ethics of "managing" money, but you possibly could have the trust make a deposit into a Roth 401k in her name. This year's and possibly next year's $4000 (assuming she has that much in summer job earnings) could then be done before FA papers are required. Retirement accounts are not considered as an asset IIRC.</p>
<p>I am afraid that you have no control over when / where / what it's invested in . That is why the deceased grandparent appointed trustees .</p>
<p>The advice about seeing an estate lawyer is very important but to save money , see the lawyer that created the trust ! There will be many lawyers when they hear the word " trust " that will create unnecessary expenditures for some very basic questions answered . </p>
<p>Your D should go with you to visit the lawyer and clearly understand the terms. It's technically not hers yet .</p>
<p>If she is sharing a family trust with other siblings or relatives, there is a K1 form that will be filed every year with her taxes ( under "unearned income" ) by the trustees . </p>
<p>The trustees may elect to have your D use the income from the trust for monthly expenses to help with current school bills . This may not be a factor if there is already a current beneficiary who already receives the income monthly from it ( like the deceased grandparent's very young living 4th wife which happened in one family I know !) . Or the trustees may decide to reinvest all the earnings from the trust which , after their one percent management fee ( by law ) , means that she will have some growth and more money in there by the time she reaches 25 .</p>
<p>The school ( esp. Profile schools , but I think this question is on teh FAFSA now ) will figure out a calculation based on the market value of the trust for financial aid purposes.</p>
<p>Schools will not care if she can utilize the funds now or later, they will tell you to borrow against them. I know this from personal experience. </p>
<p>For the record - I reported all Trust money on my FAFSA. The idea of not reporting was one presented to me, not one that I acted upon.</p>
<p>Once a trust is written and the benefactor is deceased there is nothing that can be done to change it, it is a legal document.</p>
<p>In most cases it make the most sense to spend down the trust immediately. In other words pay the first year up front. The tax implications are reported on the students tax return which is typically at a lower rate. The next FAFSA year then has a smaller amount of which to take 20%.</p>
<p>To Garland and Simba: I hear you and understand where you're coming from; however, don't preach to me as if I were born with a sliver spoon in MY mouth. </p>
<p>I am from the streets of West Philadelphia. I worked my way to get everything I have (nice home in Cherry Hill, NJ and a shore condo in Wildwood, NJ). That doesn't make me rich.</p>
<p>Don't give me the crap about how lucky I should feel. That's poor man's speak. One thing I've learned...the rich are always looking for loopholes to exploit. It's only the poor who are concerned about "doing the right thing." So don't give me that crap. If that's all you have to offer...please...save it.</p>
<p>To all the others who have offered sincere advice...THANK YOU. It will be challenging...and I am going to continue to look for ways to minimize the impact of this burden...but it will be difficult.</p>
<p>My daughter's maternal grandmother left her a house in Swarthmore, PA. Problem is, it had so many debts against it, it had to be sold. That's why this money is becoming a problem. It was never intended to be cash or else we would have planned better. </p>
<p>Thanks again to all those who have offered sincere advice.</p>
<p>Patch12- I don't understand the hostility towards Garland and Simba. I went back and read their posts and didn't see anything offensive. Your response that," the rich are always looking for loopholes to exploit. It's only the poor who are concerned about "doing the right thing", as a defense for wanting to shelter the $100k is interesting.
Don't get me wrong, I understand your not wanting to spend money that you don't really even have access to yet, but you have to understand that many people ( myself included) will be borrowing a lot of money to pay for college and would love to know that the would have the ablilty to pay off the loans soon after graduating.
I think that if you really want valid financial advice and don't want to hear from people, that you refer to as "clowns" it would probably be best to avoid message boards and go see an accountant.</p>
<p>Don't give me the "high hat" chacha. I, too, borrowed tens of thousands to pay for college. You are not in that class by yourself. I do find their comments offensive. I don't need to be counseled on what financial aid is for. </p>
<p>I am looking for real advice from anyone who has either gone through this or has explicit knowledge of what, if anything, can be done. </p>
<p>What am I saying you ask? If you don't have any helpful ADVICE, please don't write anything at all. That includes you Chacha. I don't see any advice in your last post. Next time...SHHHH. </p>
<p>As I have stated earlier, to all those who have responded with helpful advice, a sincere THANK YOU!! To those who are envious of my daughter's inheritance...SHHHH.</p>
<p>Actually, I DID give you advice...but perhaps I should put it in simple terms for you:
Stop trying to get FREE advice from a message board on how to find a loophole, like the one you say those dishonest "rich" people take advantage of, and go spend some money and HIRE a qualified accountant.
PS you might want to spend a little money on a massage too, you seem a little tense!</p>
<p>Patch,</p>
<p>I am originally from the streets of North Philadelphia and, like you, worked for what I have. I understand where you are coming from. My advice is this: if you are going to ask for help on a forum like this one, you have to be prepared to receive all sorts of responses. Some of them may be good and some of them almost certainly will not be. You may like some of the advice you get and almost certainly will not like some of it. Lashing out by saying things like "screw you" or trying to silence people who are saying things that you do not wish to hear is only going to get people to ignore you the next time you have a question. Take what you want from the forum and ignore the rest.</p>
<p>By the way, chacha had some reasonable advice for you - talk to an accountant.</p>
<p>Patch12, it matters little to the FA office whether the trust property is money or is a house. If the house hadn't been sold, the value of the trust (the equity in the house) would still have been considered to be an asset available to pay for college, particularly if your d was the beneficiary and the house was not a primary residence.</p>
<p>Sorry you don't want to hear that, but you're on a public message board and the rest of us will not SSSHHHHHHH just because you say so. If you only want to hear from people who agree with you, find another venue.</p>
<p>"I have (nice home in Cherry Hill, NJ and a shore condo in Wildwood, NJ). "</p>
<p>with that kind of assets, you ain't gonna get nothing.</p>
<p>Just because you want to cry poor doesn't make you poor. It makes no difference whether you came from streets of Philadelphia or Malibu Beach, the aid is given to those who need it. UNDERSTAND ??</p>
<p>UNless you outright lie and cheat, there is nothing you can do. This ain't no crap.</p>
<p>Here's some more sincere advice: don't admit the possiblity of a committing a crime on a public bulletin board. See, non-reporting "in the mix." (post #11, Prosecution Exhibit 1)</p>
<p>I do understand your frustation. This asset represents all or part of a lifetime of earnings for a grandparent. That grandparent may not have been expecting what may have taken upward of 50 years to be spent down for college in 3 years! Also, had the grandparent passed away 3-5 years later, all or part of that money may have been intact for the beneficiary for a downpayment on a home at 25, and the college would not have gotten a penny of that money if the grandparent died during or after senior year. This is very frustrating, and I think that is where much of the emotion is coming from. That said, bassdad had some good advice about expecting to hear a variety of advice. I would still spend money to see a professional with specific knowledge for these situations, and it may be that nothing can be done.</p>
<p>Your kid's got a 100K nest egg, you have two homes, but you still want other people to take care of you.</p>
<p>That's not rich people talk or poor people talk--that's mooch's talk.</p>
<p>I'm sure you'll find a way to make it work.</p>
<p>To All:</p>
<p>1) I always intended to sit with a Certified Financial Planner once we know who the ultimate Trustee of the account is and in what type of long term Trust the money will reside. Asking for people to share their experiences was not in lieu of eventually speaking to professionals. </p>
<p>2) Bassdad and Northeast Mom...u r correct. I should just tune out the crap I don't want to hear. Point taken.</p>
<p>3) Northeast Mom...u r correct. My D's grandmother and grandfather bought the property 50 years ago. It would be a sin to see that money disappear in four years simply because the grandmother died at an "inconvenient" time. Thanks for your sympathetic and insightful comments.</p>
<p>4) Garland: I am neither rich nor a mooch. Also, the EFC on my assets is less than 6%, not the 20%+ that schools and the FED will expect from my daughter's assets. Furthermore, on my homes, they don't count the value of the homes. Instead, they measure the EQUITY in those homes and count 5.6% of that as my EFC. So get a clue before you make stupid comments.</p>
<p>Simba,</p>
<p>Again, you don't know about what you speak (post number 30). The equity of my assets are taxed at 5.6%. The operative word of that sentence is EQUITY. Have you paid attention to the real estate market lately? </p>
<p>When did I ever cry poor? Please show me? Just sounds like envy of my D's inheritance. What else could it be?</p>
<p>dt123: to say that all options have to be considered is not a crime. Clearly you didn't attend law school.</p>
<p>Futhermore, we will not defraud the colleges or govt. It's just incredibly frustrating.</p>
<p>Chacha: I am asking people to share their personal experiences or explicit knowledge on my situation. You don't have that. So why are you writing anything. Your advice is unwarranted and unsolicited for this thread. </p>
<p>Was that simple enough for you to understand or should I try to dumb it down even further?</p>
<p>"The equity of my assets are taxed at 5.6%."</p>
<p>Let me dumb it down for you. 5.6% of equity of any kind is CONSIDERED in calculations, NOT TAXED.</p>
<p>"Just sounds like envy of my D's inheritance.".....a huge big pile of 100K....do you think it is big enough for people to get jealous?</p>
<p>I guess I am confused that if
the grandparent ( presumably your parents) had a home to bequeath- why they didn't leave it to you or your husband,
If it had been left to you and your husband, it would be considered for aid as any other assets ( except for retirement accounts)
So if grandparent died and then home had to be sold- whose decision was it to put it into a trust for granddaughter?
If the grandparent left the house and not the trust account, how can a trustee decide what to do with the money from the house?</p>
<p>If you use FAFSA home equity isn't considered.
Also- I have found info about trusts which revert to the minor when they turn 21, but not a lot about ones that wait till 25. I imagine there is a trust manager?</p>
<p>If the funds are able to be accessed before it reverts to your daughter- you should be able to withdraw things that are for her use and used for educational expenses- like a computer although I don't think you can take money out for regular parental expenses like clothing.</p>
<p>The worst case scenario is she has to attend a school that only uses FAFSA not PROFILE so not to take into account your 2nd home.
Takes out loans to pay for school, but then when she comes of age, accesses the money to pay off loans.
Not the best way that the money could have been maximized, that would have been for it to be put into the parents name, but still benefits the daughter.
<a href="http://www.finaid.org/fafsa/maximize.phtml%5B/url%5D">http://www.finaid.org/fafsa/maximize.phtml</a></p>
<p>I would also suggest, that if you intend on frequenting these forums- that you back up a little and rework your bedside manner- there are many who can give much help and support through the process of transitioning our selves and our kids through their college years- but being rude is not going to increase your chances of getting good advice.</p>
<p>
[quote]
The worst case scenario is she has to attend a school that only uses FAFSA not PROFILE so not to take into account your 2nd home.
[/quote]
</p>
<p>FAFSA doesn't take into account the equity in the primary residence. It does take into account the equity in the second home (or any other real estate).</p>