<p>Our son is college-bound in 2009 and we're trying to plan for our FAFSA app.</p>
<p>Our younger daughter is developmentally disabled and has a special needs trust in order to provide for her long-term financial needs. I know that custodial trusts need to be reported for FAFSA/PROFILE, but would a special needs trust need to be since it is designated to be used only for our daughter's needs?</p>
<p>Hopefully some one more knowledgeable will reply soon, but I am sure I have read that these types of trusts can be addressed. I do not believe you would report it at all on FAFSA, as it is your DDs asset, not the families. As to Profile, some one else will have to tell you that answer</p>
<p>Here is a really good explanation: FinAid</a> | Saving for College | Trust Funds and Financial Aid</p>
<p>Hi ... I checked with a Trusts & Estates/Disability lawyer I know in NYS who is also well-versed in the college financial aid process ...</p>
<p>According to this attorney, if your daughter's SNT is drafted to comply with governing Fed/State laws to allow her to qualify and receive needs-based benefits such as SSI or Medicaid, then the SNT must include express language which provides that the SNT exists for your daughter's exclusive and continuing benefit, to the exclusion of 3rd party beneficiaries such as a parent or sibling. </p>
<p>As such, your daughter's SNT should not be reported as a family asset on your son's FAFSA application, since the Trustee has no discretion to make SNT assets or income available to your son (or to you, as a parent, for that matter, other than probably to reimburse you for out of pocket expenses).</p>
<p>Of course, you should definitely check with an accountant or financial advisor in your state who is familiar with the college financial aid process, but this attorney seemed confident that the situation would be handled as described above if the student/applicant was a NYS resident. </p>
<p>Hope this helps! Best of luck to you and your son ...</p>
<p>Yes, her SNT is set up so that she can benefit from SSI and Medicaid and other needs-based programs. It is for her benefit only.</p>
<p>Thanks for everyone for your help. I was pretty sure that it would be excluded due to the way it was set up but the discussion of other trusts etc. got me wondering again!</p>
<p>It would be sad to see a SNT taxed for the FA of another sibling, especially considering that typically the remainder of an SNT (typically designated only for things not covered by government benefits) is forfeited (to the government to reimburse for cost of benefits) after the death of the beneficiary. </p>
<p>Good luck to you taking care of your children.</p>