<p>My grandmother died a couple of months ago. She lived very frugally and no one thought she had any money, but now that her estate was settled we have discovered she left $14,000 for each of her great-grandchildren. This was unexpected so we hadn't noted that my DD was to inherit any money. Now I am wondering if I deposit the check to my daughter's account will the Financial Aid offices want a bank statement and if so, will they think we were dishonest in reporting our financial status? Do we have a responsibility to tell the schools about this since it was not reflected in our FAFSA or CSS at the time we filed those statements?</p>
<p>If the estate was not yet settled on the date that the FAFSA was filed, then your daughter did not have that money on that date even if it had been promised to her. Think of it this way: if there had been a number of large bills pending, the estate would have had to settle them first before distributing any money, and the great-grands might have ended up with nothing at all.</p>
<p>Assets are reported as of the date of the initial filing of the FAFSA and Profile. The asset numbers are NOT updated after that initial filing. If the ,one was not in her account as of that initial filing, it will not be considered for aid for 2014-2015 school year.</p>
<p>BUT…it WILL be considered for the following year if it is still in her account. And student assets are assessed per FAFSA at 20% towards the EFC. Parent assets are 5.6%. If there is any to get this as a parent asset, you should try to do it.</p>
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<p>If the inheritance is invested in a 529 plan, it will be assessed as if it were a parent asset (at least as far as FAFSA is concerned).</p>
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<p>What I think happymomof1 means is if the estate proceeds have not yet been distributed to your daughter as of the data the FAFSA was filed, you are okay for this year. Just a nit picky point, but “settled” implies the final closing of the estate. In fact, sometimes heirs get more than one distribution, depending on how long it takes to liquidate the assets, and a lot of times there is a small additional one at the end when the final bills are settled and it is time to close the bank accounts.</p>
<p>But in any case… it will show up in her account next year and be counted as an asset then if it remains there as of the date you fill out the FAFSA.</p>
<p>This is an aside, but some states have an inheritance tax (an example would be Maryland, which has both an estate and an inheritance tax), so she may have to file a state tax return next year and include it on that. But it won’t show up on her federal return, so the colleges will not see it thru the tax returns. But just so you know to check in case she has to file a return.</p>
<p>thanks for the replies folks!</p>