<p>Ek, This is not a primary residence! Also, the home was sold.</p>
<p>chedva and I cross posted, sorry.</p>
<p>Emeraldkity:</p>
<p>Thank you for your helpful suggestions. It is a little more complicated than it appears.</p>
<p>My mother-in-law left the house to her granddaughter (my D) to be received when she turns 35. Until such time, my ex-wife, daughter of the deceased, was given the ability to live in the house but not take any further loans against the property. </p>
<p>There were over $70K in equity loans taken against the property. In addition, there was an inheritance tax, property tax and other expenses. These expenses had to be settled or else the property could have been foreclosed. My ex-wife has to sell the property to pay off the debt. This is where the challenge began.</p>
<p>Once the house clears settlement, it will end up in a trust that cannot be touched by my daughter until she is 25 (this is a court order, not our request). I have concerns over how the money will be invested and whether or not she'll be able to even access the funds for school (trying to work out an educational provision in the trust...not as easy to get approved as it may seem).</p>
<p>That's the situation.</p>
<p>Concerning your last paragraph: My "rude" posts are intended to ward off those who leave what I consider to be bothersome posts. You are not in that category. I truly appreciate your help and will investigate further. I also appreciate the many posts from others who are sincerely trying to offer some suggestions based on their own experiences or knowledge.</p>
<p>Please do not become the defender of people like Simba, Chacha and Garland. </p>
<p>Furthermore, if people find me offensive, they really shouldn't respond to my thread.</p>
<p>TO ALL:</p>
<p>Thanks for your advice. If you have found my comments offensive and would rather not offer advice - I understand. No worries. </p>
<p>To those who believe you can offer additional insight - I am grateful.</p>
<p>I only ask that you don't offer judgments over me or my family based on our situation. I am not posting to be condemned for trying to protect my daughter's assets. If that's wrong of me as a parent (in your eyes), please just find another thread on which to post. I am just looking for help...not your condemnation.</p>
<p>To the poster who stated Trusts are accessed at age 21 not 25. The person who sets up the trust can dictate anything they want - my mom cannot touch hers until age 48. My grandfather set his up so that the beneficiaries got 10% of the income per year (no principal) for 10 years and then the balance paid out. My mom always jokes that she will set hers up to say I have to take care of her dog in order to get anything. The Trust Document is basically the wishes of the deceased, spelled out and legally binding. If the Trustee is a corporate trustee they are limited on their investment options. A corporate trustee cannot be as risky as many of us would like to be with our investments. Yes, it is true that grandparents would be smarter leaving all the money to their children as FAFSA would take less of those assets.</p>
<p>To the poster who stated Trusts are accessed at age 21 not 25. The person who sets up the trust can dictate anything they want - my mom cannot touch hers until age 48</p>
<p>That would be me- however I said I didn't find ** much** info, not that I didn't find * any*.</p>
<p>While I appreciate that the situation is very complex and obviously needs a professional- I would restate that there isn't any call to use name call in your posts.
Im glad that you were able to get some info- I would suggest the finaid calc on the finaid.org web site. We have found it to be a pretty close appoximation of what the actual EFC came to be.</p>
<p>I am not as familiar with ChaCha- but Simba and Garland are long time respected posters & while I am not going to read back this entire thread, I didn't read anything that I found hostile that they have written.</p>
<p>I didn't call anyone names :(</p>
<p>The bottom line is - if you are going to be honest on your FAFSA forms then the Trust Assets will be considered and ultimately used for college expenses. It does not matter when you have access to them etc.. The only argument that works on appeal (sometimes) is in regards to a parent who has money in a Trust. If that parent has very little saved for retirement an argument can be made that the Trust should be looked at as any other retirement asset and should not be considered in the EFC calculation. This argument is null and void if, for instance, the parents have $500,000 in an IRA or 401K plan.</p>
<p>no Im sorry cubs fan I was referring to the OP</p>
<p>I should have done a c & p
I agree that some schools will allow you to explain more fully your finaid situation
however some schools will adjust but others wont</p>
<p>Why are people even dealing with this hostile and rude person?</p>
<p>I can understand the frustration of Patch, in that the timing of the death sets up complicated circumstances that would not even arise had grandma died a few years later, the mention of an ex-spouse means further complication.</p>
<p>So, knowing that all of us old timers experienced our initial frustrations with the reality of financial aid, I am assuming Patch is banging his head against the wall at the inability to control or aid or do anything to minimize this issue. Because FAFSA is a formula, this trust in trying to protect D has played into all the weak points- not only is the asset in the kids name, rather than the parents, but it cannot be used each year, so the FULL 100% value is assessed each year. It is ashame most financial planners have no clue about college aid.</p>
<p>I agree with the others, if there is a 2nd home with any level of equity, that may be enough of an asset to preclude basic aid like Pell, etc. Unless they fit that AGI below $50k??? But, if they are looking at a private school with campus aid and FAFSA only, running the numbers A} with no trust $ v B} trust value in parents name and C} trust calue in kids name could show dramatic differences on the bottom line</p>
<p>I think the most productive answer for patch is to learn all about how the aid would work differently in the different scenarios and then present that to the trustee- essentially the value will be used to pay off loans no matter what grandma wanted, so maybe the trustee has some latitute to figure out LEGAL ways to minimize the affects and minimize rather than maximize the loans! It's all well and good to say we don't want this to go for college, but just because the deceased said that doesn't mean it will work that way in reality, once the trustee learns that one way or another it is going for college- now or later, maybe there would be some latitude- pay it out ASAP and gain some aid for later years of school?</p>
<p>Just a thought, the trustee has no clue how the financial aid is being affected by this.</p>
<p>I think Patch is coming on rather strong and hostile, but with only 13 posts, I'd guess he is extremely frustrated with the reality of the situation and the ex-spouse thing makes it worse, so while I wish he were being more polite, and I agree with the points many of you are making, I still think he can be helped ;)</p>
<p>Indeed it is frustrating to have money that one cannot get to, and have this affect finaid. BUT consider the alternative...not having the money at all. At least if the OPs child has to take out loans, there will be money at some point that can be used to pay off the loans. Many others here are not so fortunate. As I said, others here would envy your situation. Many kids don't even have the option of taking out a significant loan for a "dreamish" school because they don't have a nest egg waiting for them at age 25. I guess my perspective is...feel fortunate that a relative thought of your child and that some cash will be available to this student in the future to pay for loans amassed now. The reality is that by doing this, the student will not have loan payments and will still benefit financially after college.</p>
<p>Come on people. Can't you see he's in pain over the "burden" of having to carry around an extra $100k. It's got to weigh at least 10-12 pounds.</p>
<p>It's not his money but it very well may be causing him to have to pay out more every year, since his d. may have difficulty qualifying for loans in her own name. I wouldn't be very happy about an EFC that was $20K higher every year based on untouchable money if I also felt it was my moral obligation as a parent to pay my kid's way through college. Yes, he can tell the d. right now that she will have to pay him back as soon as she comes into the trust... but emotionally that's not such an easy bridge to cross between parent & child. </p>
<p>If she had access to the money she would indeed have to put a large chunk of it toward college, but there are all sorts of things that could be done legally and within the financial rules to lessen the bite over time. For example, if the child is employed, then each year in addition to college expenses some of the money could be paid into a Roth IRA, effectively shielding it from financial aid consideration in subsequent years, and at least preserving a little more of it for future years.</p>
<p>Thanks to all those posters who have offered constructive suggestions (e.g. calmom and lintball). </p>
<p>Thumper1: I understand how you might feel. However, I don't think you understand the way colleges provide aid. They provide more aid to those who need it. Consequently, if a student with significant need, applies to both a $40K college and a $20K college, the family's expected contribution might be the same. Don't assume that because one has more funds it means the students with less funds don't have the same options. It just isn't true.</p>
<p>Calmom is right...it isn't MY money. But the fact that this money exists WILL cost ME more money annually.</p>
<p>Guess you could sell the beach house and put those payments toward tuition. You see, you have options that a $60K a year family of 5 will never have. Quit *****ing.</p>
<p>Well bandit, that's not an option. There isn't really any equity in the beach condo (seen the real estate market lately)? After fees to sell it and paying off the mortgage, I'd be in a negative equity situation. </p>
<p>As for the $60K per year family of five...that's a GREAT situation to be in for college. You will get the aid you need, provided your kid(s) are the types of candidates for which the expensive schools seek. Your EFC will be very low.</p>
<p>Lastly, I know it seems like complaining to you, but I am not rich. Why should I have to pay more because of a trust to my kid that doesn't have anything to do directly with me? If she could access the cash, that would be one thing...but without being able to tap the cash, our EFC increases, which means a lot more money from parents.</p>
<p>I'm sorry you seem bitter about my situation. Maybe your financial outlook will improve and you'll see things from a different perspective.</p>
<p>"Why should I have to pay more because of a trust to my kid that doesn't have anything to do directly with me?"</p>
<p>I don't understand the logic here. Why do you have to pay more? The maximum penalty is that you let someone else (bank) to let you use (loan) their money. The cost is only the interest expense. Rather than thinking it as a 100k gift, you can think of it as a 90k gift. Like a premature withdrawl from a CD.</p>
<p>Actually, the discounted present value of that 100k @25 would be about 73 k. This assumes that cost of the money is 6% and you will start borrowing the day she turns 18. In year 1, she can borrow 16.6k, year 2 - 17.6, year 3 - 18.7, year 4 - 19.8. You can repay the entire loan with zero out-of-pocket expense on your part.</p>
<p>I know I am not supposed to post on this thread, but...</p>
<p>Re the second home--for one, once sold, you wouldn't be paying a second mortgage, so those payments could go to school,</p>
<p>and two, it is puzzling that, knowing you had a child approaching college, you'd put your money into a second home, rather than college savings. A free choice, but one that leads to consequences.</p>