My husband passed away 10 years ago when my son was 7. The money is currently in a CD. Should this be reported as an asset?
Yes. Death benefit funds are reported as an asset if held at the time that the financial aid form is completed (assuming that the funds are in a reportable account; for instance, if they were placed in an IRA or other qualified retirement account, that would not be reported on FAFSA). Death benefit proceeds are not reported as income, unless there is some taxable component that is included in AGI on a tax form.
What name is the CD in? It could have a major impact on your calculated need.
The actual name on the CD is less important than who is the constructive owner of the funds represented by the CD.