<p>I have questions now that my daughter and I are completing the CSS profile.
Am I ill-informed to apply for financial aid if I know my daughter's grandparents can contribute?
Grandparents are somewhat wealthy and willing and able to help with college expenses; I've been assuming financial aid would be awarded based on my assets and income (I am a single mother, never married, no support from father).
But I see that one of the CSS supplemental questions (required for some of the colleges she's applying to) asks for details of any trusts parent is beneficiary of, and-- as my parents have a revocable family trust to hold their assets--they are then asking for grandparents' net worth.
It seems clear I need to be definite about how much grandparents can contribute.
I'm not sure what to put: If grandparents turn out to contribute more than I indicated, would colleges then want to rescind offer? (If grandparents were to pay tuition directly to college) it seems absolutely crucial that I clear estimate what they would/could contribute--rather than underestimate;
Any thought or advisement on this subject would be much appreciated.
Thanks</p>
<p>I may be wrong, but I don't think they mean a normal living trust where your parents (student's grandparents) put all their assets in a trust to avoid probate. In that case you are only a beneficiary when they die & they could sell it all, spend it, or use it to pay for the old folks home leaving you nothing. In my understanding it means an actual trust wherein you are right now the beneficiary- so, if your parents died it would apply</p>
<p>My grandparents just set up a trust also (to avoid probate), where my dad and his sibling are named as beneficaries. Unlike the post above, my grandparents are not offering to help out with college expenses as they have many grandchildren. Should my parents list themselves as “beneficiaries of a trust” on financial aid documents? My grandparents are not wealthy by any means, they are middle class and worked hard all of their lives to accumulate what they have.</p>
<p>Are you a beneficiary of the trust…or is your daughter? If so, my understanding is that if you are a BENEFICIARY of the trust, your value would need to be reported on the FAFSA/Profile. If you are not a beneficiary of the trust, you would not report it.</p>
<p>Someone who is positive about this should reply. When we were dealing with trusts a couple of years ago, this is what we were told we had to do. In our case it was an irrevocable trust and even though we had NO ACCESS to any of the funds, if we had become part of the trust, WE and our kids (all would have been beneficiaries) were required to list their share of the value.</p>
<p>So…check for info about this. As I recall, there IS a section on the FAFSA that deals with this question.</p>
<p>I think Somemom is correct. If one is currently receiving income from a trust, then they would be considered beneficiaries. But if the trust does not start distributing income until the grantor dies, then for CSS Profile purposes, they would not yet be considered beneficiaries.</p>
<p>My parents set up a trust to avoid probate. When my dad died, my mother became the beneficiary and she is receiving income currently. When she dies, my sister and I will become the beneficiaries and receive the income. I did not list my mother’s trust anywhere on the CSS Profile.</p>
<p>So to Chriscross and steenamad, you should not list your parents as beneficiaries of a trust.</p>
<p>Of course, I’m not an accountant so I suppose I could be wrong, but I don’t think so!</p>
<p>edit: Thumper, now you have me second-guessing myself! My parents’ trust was a REVOCABLE trust, meaning that, until they died, they could change the terms of the trust at any time. So it wouldn’t make sense for me to report the value of the trust’s assets as part of my own net worth since it could change before I ever had access to it. But you’ve mentioned IRREVOCABLE trusts, and the rules there might be different as it pertains to reporting on CSS Profile. Here’s hoping an accountant will weigh in.</p>
<p>The irrevocable trust had a value. The beneficiaries were named in the trust. The value of each beneficiary’s share had to be declared on the FAFSA/Profile. The reality was that this trust could have been liquidated the day after the FAFSA was filed…and the assets were mighty HIGH if that had been done.</p>
<p>Because this trust had a value if sold (it was property…), each beneficiary had a “value” associated with their share of the trust. It didn’t matter that if the trust was NOT liquidated, that value was basically meaningless.</p>
<p>Edit…I have to wonder if you even have to post the value of a revocable trust WHILE you are a beneficiary. Yes…your parents “could” change the provisions at any time. BUT the reality is that unless they did, you also would have a value as a beneficiary to this trust.</p>
<p>To be honest, I’m not sure but I know there is language on the FAFSA guidelines that mentions that these must be reported if you are a beneficiary. I sure wish I could find my infor.</p>
<p>If it turns out you do have to report the trust value, you could always have your parents remove you an a beneficiary for a few years. Then, if your parents still want to contribute, have them loan you the money (instead of giving it to you, which you would have to report as income on FAFSA), or just take out other loans.</p>
<p>Then in the spring semester of your daughter’s junior year (after the forms have been filed for her senior year), they can put you back as a beneficiary, and start forgiving the loans (if they lend to both you and your daughter, they can forgive something like $48K/year) or start paying off any other loans, and/or give you money for your daughter’s senior year and the rest of her junior year.</p>
<p>This would maximize your financial aid, and preserve the most family assets.</p>
<p>Even if you don’t have to report the trust value, you should examine carefully what other effects on your FA the will be if your parents give you a large sum of money. You may still want to set it up as loans that your parents can later forgive.</p>
<p>Interesting. I’m in my mid-50s, my parents are in their mid-80s. They have trusts that will trigger and from which I will conceiveably benefit from when both are deceased. I do not consider them an asset as I have no benefit that I receive nor can I tap them tomorrow for college costs. I will not be a beneficiary until they are deceased. That is how I read the information, I have never considered the potential value of their estate nor do I know it’s value (today) except in a very general way. How could I call that an asset of mine that would impact my children? I don’t know it’s value, I can’t tap it and I don’t own it. I do believe the language in the CSS refers to trusts that are active and disbursing monies and/or can be tapped at any time by the beneficiary. It depends on the trust and how it is set up. My son’s friend lost his father when he was young. Proceeds were put into a trust for him that were set to begin disbursements when he turned 18 (to pay for college), there is a CSS value to that because disbursements can be made now in my opinion.</p>