I was told today that sibling’s assets are not counted by FAFSA. So if we have younger child who is still in school, does not matter how much money he or she has on his or her name, this money is not reported for upcoming freshman FAFSA. What about CSS profile?
If this is correct then it seems it makes perfect sense to open a bank account and possibly a brokerage account to my school child name and move assets there.
If it’s your money, then it has to be reported as your asset.
When we opened accounts for our minor children, we had to have a parent on the account with them.
Also unearned income of children (interest, dividends) can be taxed at trust rates according to kiddie tax rules.
Are you planning to give that money to your younger child with no strings attached, or are you putting that money in an account with their name on it, but really it’s still your money?
If it’s your money, it doesn’t matter whose account it is…or even if you stuff your mattress with it…it’s your money and must be reported on the financial aid forms as your money.
Also, before you go through these financial gymnastics…are you saying you have SOOOOO much in assets that it’s going to really affect need based aid? Remember, your assets are only assessed for FAFSA purposes at 5.6%.
At some point, you will be paying the piper here. Remember, when your younger kid goes to college…those assets will be assessed…on way or another.
@BelknapPoint anything to add?
Assets that legitimately belong to a sibling are not reported on FAFSA or Profile. Any assets not belonging to a sibling that are moved to an account in that sibling’s name are not legitimately owned by the sibling. Profile has (or at least used to have) a question that asks about parent assets that are held in a sibling’s name; reporting the value of these assets is/was required.
To legitimately transfer assets to an account in a child’s name, it must be a bona fide gift with zero expectation that the assets will return to the original owner.
Aside from the fraud aspects…
How will you get that money back if your name isn’t on that account?
If that child is a minor, won’t a parent’s name have to be on there as well?