<p>Hello. I read with interest a thread from about a year ago where voguecommodore was in a difficult situation, due to his mom having remarried (and his stepfather not wanting to help pay for school). I have questions in a similar regard:</p>
<ul>
<li>I am engaged to a woman I dated in college, who now has 4 boys (ages 16, 14, 12 and 9). I have a daughter (11).</li>
<li>I have a 529 set up for my daughter that my ex-wife and I contribute to; should be ok to use that (depending on the market over the next 7 years) to pay for her college</li>
<li>concern here is my fiancee's boys. Their dad nickles and dimes her at every turn and has vowed to pay his half of college expenses (his family is well off, he is not) via a 529 his mom established. Even if 529 balance exceeds half of their education cost, he says he will only allow half of college costs to be withdrawn, the balance he wants us to pay for</li>
<li>my fiancee is a social worker and does not draw a high salary. I do make a good income</li>
</ul>
<p>We are considering forgoing getting formally (legally) married, until such time as her boys have finished school and we won't get hung up on Financial Aid forms. My sense from reading other posts is that PROFILE schools would factor my income into their financial aid picture and thereby limit what aid they get. I am ready and willing to contribute to their college costs to whatever degree we can, but with 4 of her boys (plus my daughter), I/we also need to be realistic about what we can do. </p>
<p>What I'm asking is this: as long as we don't legally get married, it's my understanding that my income would not be included in their financial aid considerations, correct? Our hope is that we can maximize any merit aid and/or loans/grants available to offset as much cost as possible, leaving us with a "manageable" (not sure what that is yet) amount to bridge after that.</p>
<p>Appreciate any thoughts/comments. Very impressed with the quality of responses and information from members of this board.</p>
<p>As long as you don’t live in a common law state in which you would end up being legally recognized as married by virtue of living together, his info is not included. You wouldn’t list him or his kids in your household size, nor would he list you/your D in his (when you list HH size/number in college on the FAFSA). That’s because you are living together the way two friends would live together. If you lived with a platonic friend & friend’s family, you wouldn’t give that person’s income info nor would you list him/her and family in you own household size.</p>
<p>My coworker just had a very irate parent on the phone yesterday about this very issue. His son had received a Pell grant last year, and this year all he got was an unsubsidized loan and a parent PLUS offer. When we compared last year’s FAFSA to this year’s, we realized that it was because he married a woman last year whose income was $125,000. My coworker & I later decided we would just “live in sin” in a case like that.</p>
<p>Actually, all schools would factor in your income. FAFSA requires stepparent income as well.</p>
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<p>Who is the actual owner of this 529? Sounds like the grandmother, not the dad. Does the grandmother endorse dad’s point of view or is this just him being spiteful? Perhaps your fiance could have a discussion with the grandmother if they’re still on good terms.</p>
<p>I wouldn’t be a step-parent, right? That’s really core to what I was asking - i.e. if we don’t get legally married, do I impact their financial aid picture. My sense is that only a legal step-parent would.</p>
<p>Don’t know, that’s a legitimate question (i.e. in whose name the 529’s are in). Not sure if she shares her son’s take on the situation - might be worth exploring, thx.</p>
<p>If you aren’t married legally, and the kids are living with her, then the only income that needs to be reported for the FAFSA is HER income. In the case of CSS Profile, HIS income and assets would also be reported.</p>
<p>The only income that is reportable for FAFSA for your daughter, if she is living with you, is YOUR income. In the case of CSS Profile, your ex-wife’s income would also count.</p>
<p>If you are legally married, both of your incomes are reportable for FAFSA and for CSS Profile for the children of either of you who are living with you. It is my understanding that both of your incomes would be reportable for CSS Profile for children who aren’t living with you.</p>
<p>IF your “roommate”'s income looks to be so unbelievably low so as to make support for her four children impossible, the college/university might ask her to show how she is affording to live when they review her file. In that case, your living situation might come into consideration. But it looks to me like she can claim that she’s supporting them on her own.</p>
<p>I hate to tell anyone that they should live together and raise a gang of kids without the emotional security of legal marriage, but in your case it may be the better financial decision.</p>
<p>You’re correct about the difference between legal step-parent and boyfriend/partner/fiancee etc. If nothing else, you could tell people you’re engaged. As I have mentioned elsewhere, I spent a lot of time researching and flat out asking financial aid offices about this; I even called the Feds and talked to a FAFSA person. Every time I was told that if were were not married, then my partner’s income was not included, period. The reasoning I was repeatedly given is that if he were to leave tomorrow, my children would have no legal claim to his support or income, and therefore it cannot be considered as a possible funding source. </p>
<p>As others have said, if her income is low, she may be asked how she supports the children. I was also advised not to accept cash payments from my partner for anything – he doesn’t give me money for the children, or for my bills for example – because that money could be considered reportable as gift/other income.</p>
<p>It seems possible that the common law marriage clause may only apply if the two people in it are the biological parents of the child: </p>
<p>“If your [biological] parents are living together and have not been formally married but meet the criteria in their state for a common-law marriage, they should report their status as married on the application. If the state does not consider their situation to be a common-law marriage, then you should follow the rules for divorced parents. Check with the appropriate state agency concerning the definition of a common-law marriage.” </p>
<p>Additionally, two people in a common law state who are living together are not automatically common law married. Usually, there has be <em>intent</em> to present each other as husband/wife, which can be as simple as calling the other person that in public, or as complicated as proving one person supports the other, that they file taxes jointly, that there has been name change or sharing of property, etc. If you don’t <em>want</em> to be common law married, just make sure you don’t do those things.</p>
<p>I think the Bible needs to be updated with a clause that says “it’s ok to live in sin for financial aid purposes :-)”. I’ve tried explaining this to my bf and none of his grown children went to college so he is clueless about the process. If I married him tomorrow, I would gain by having a bigger asset protection allowance (due there being 2 parents one of which is 61 yo), but the implications of having to include his business tax info on the fafsa would be a nightmare.</p>
<p>he’s so clueless, he said “just don’t file the fafsa”. I explained that is not doable and that my son’s school bases his scholarship on that info (to the tune of 32K this year) and that he couldn’t get any federal loans. So unless I’m willing to pay 55k for my son’s last year of school 2010-2011, there WILL be a fafsa filed in January 2010</p>
<p>That is my situation as well. My kids’ father died 10 years ago. When I remarried my new husband’s income had to be included in financial aid calculations on the FAFSA, even though he has no legal obligation to support my children :</p>
<p>You have to weigh whether not marrying and having to report your income on the FAFSA vs. the benefits of filing joint income taxes.</p>
<p>Marriage can affect your assets adversely not only for financial aid but in taxes and inheritance laws. All of these things need to be researched so that everyone knows what the financial implications of the marriage are. It’s particularly important when there are step and halfs involved. A prenuptial agreement is often the way to go when there are ambiguous ways that the assets can be distributed. But you cannot prenup or divorce agree out of being in the picture for financial aid.</p>
<p>I don’t know what the rules are for a 529 that is set up for a child. What are the child’s rights in terms of accessibility to the money? Can the owner/depositor of funds for the 529 control the outgo for legitimate tuition expenses? </p>
<p>It’s hard to say how 529s are treated by those schools that use their own apps and their own money for fin aid as they can make these judgment issues on a case by case basis. I know there are some schools that are asking for qualified plan assets in pensions and are taking those amounts into account.</p>
<p>Since every one is talking about the letter of the law and the spirit of the law and how to avoid traps, etc:
What would happen if one of these couples were married in a religious or spiritual ceremony, but NOT with a legal marriage license? Would they be able to assuage their moral concerns, yet play both sides of the fence by not being legally married?</p>
<p>If that worked for finaid, I assume the couple would not be legally married for taxes, insurance, and other legal benefits of marriage, so they are truly only receiving a ‘spiritual’ moral benefit??</p>
<p>In the most typical 529 account, the custodian of the account can change the beneficiary at any time, or withdraw the funds completely (penalty and taxes would be due, but there’s no legal restriction on withdrawals). If grandparents open a 529 account with a grandchild as a beneficiary, the grandparents control the fund and can change the beneficiary to anyone they please. The named beneficiary doesn’t have any rights to the funds.</p>
<p>The less common 529 situation is when the child is both the custodian and the beneficiary of the account via a UTMA/529. In this case the child owns the money, and the beneficiary can’t be changed to anyone else. This doesn’t seem to be the OP’s scenario.</p>
<p>somemom, I believe that since a religious/spiritual ceremony isn’t legally binding without a license from the county courthouse, then the union wouldn’t be considered legally binding as far as taxes, insurance, inheritance laws, etc. This is basically the Prop 8 controversy here in California - gays can have a religious/spiritual ceremony but have no way to benefit from the legal protections of marriage (I’m not intending to open a can of worms - just stating the facts).</p>
<p>vball mom, yes, I too don’t want to start a flame war, just wondered if one could do it that way. So, if one had religious objections to ‘shacking up’ one could do a spiritual ceremony?</p>
<p>My DDs had a friend whose Dad died and then we all found out that the parents ad been married, then divorced, then got back together, but never married again, for some reason this was a major topic of discussion in our small town ;)</p>
<p>You certainly could get married “spiritually only” and not legally, if that mattered to you. The caveats I am aware of: </p>
<ol>
<li><p>In several common law states, the religious marriage would be seen as indicative of living as husband and wife, and therefore would make you common law married. As mentioned before, that could impact financial aid. </p></li>
<li><p>Many churches make the legal documentation a requirement for the religious ceremony. So, for example, a Catholic church would refuse to marry you without the legal marriage certificate, that sort of thing. </p></li>
</ol>
<p>Honestly, this is one of the arguments to me of separating marriage as a legal bond and marriage as a sacred bond. The financial implications put some people in the position of choosing between what they believe to be morally appropriate for them with what might be more financially advantageous for their family.</p>
As I have mentioned elsewhere, I spent a lot of time researching and flat out asking financial aid offices about this; I even called the Feds and talked to a FAFSA person. Every time I was told that if were were not married, then my partner’s income was not included, period. The reasoning I was repeatedly given is that if he were to leave tomorrow, my children would have no legal claim to his support or income, and therefore it cannot be considered as a possible funding source. </p>