<p>when i turn 18, i will be the beneficiary of my dads life insurance policy. the policy is for about $160,000, but this money needs to be used for my siblings and my mother, so i really want to save it for them and i dont want to use it for college.</p>
<p>the policy was supposed to go to my mother, but because of an error, i legally own the money.</p>
<p>basically, my problem is that this money needs to support my family for a number of years, and not my college education, but i am afraid i will not qualify for financial aid since i technically already have $160,000.</p>
<p>my question is: could i still qualify for any financial aid?</p>
<p>Suggest you find a trust company (many banks have such a dept) which can offer some advice. Perhaps site savingforcollege.com can offer insight.</p>
<p>I am truly no expert at this -- but just had a thought. If the money needs to go to support you family (including younger siblings) is there a way to have yourself declared their legal guardian and responsible for their care? </p>
<p>You have a situation that is going to be complicated and you will need to deal with the financial aid department quite a bit. You will still be expected to pay for college. Even if the money was in your mother's name, $160,000 in cash assets will still be expected to pay for your college unless there are other circumstances.</p>
<p>I suggest you input numbers into the financial aid calculators at <a href="http://www.finaid.org/calculators/finaidestimate.phtml%5B/url%5D">http://www.finaid.org/calculators/finaidestimate.phtml</a> using both the $160,000 in your name and in your mom's. put in the income she and you has, home equity and do the institutional and federal methodology.</p>
<p>You really need to do your research to make sure you don't lose out on FA. I wish I could help more -- there are a number of excellent financial aid advisors on the board -- so you might try posting again with a better title if you don't get more replies.</p>
<p>Most schools will recalc the FASA if you give them a reason why. I would say talk to the schools you are interested in and explain the situation. Last year I finally settled with a former employer over a pension plan issue from the early 90's. Part of this settlement came as current income even though it was for something over 15 years ago. It would have changed several things if I didn't explain it. Talk to the schools you are interested in.</p>
<p>I suspect that this will generate some negative responses, but here goes:</p>
<p>For federal income tax purposes, life insurance proceeds are not generally considered income. So in all likelihood, the $160K will not show up on a tax return. The money will be considered an asset for financial aid purposes. And for student aid purposes, student assets are assessed more harshly than parental assets. Also as to federal financial aid, if parent(s) AGI on 2006 tax return is less than 50K, all family assets will be excluded (simplified needs test) when determining federal aid.</p>
<p>Relying on the OP words (the money was supposed to go to my mother, money needs to be used for my siblings and my mother, because of an error, this money needs to support my family for a number of years), before depositing, why not endorse the check over to mother, and relinquish all rights. (This may involve an attorney drafting some document). If the $160K is listed as moms asset on FAFSA and she reports an AGI of less than 50K, this could maximize federal aid, although when it comes to a school's own money, an aid officer has more discretion.</p>
<p>On the other hand, someone looking at this could conclude that youre trying to defraud the govt and/or school you attend. The burden of responding to an allegation of fraud will be on you, which is why if there was some documentation supporting that the money was not an asset of yours may help. Good luck.</p>
<p>I had thoughts along the same lines as Jugulator -- but I don't feel qualified enough to give advice. I think that your situation is complicated enough that you need to seek the services of a professional and not a public forum. In the end, the money you pay will save you much!</p>