<p>I searched the forum and didn't find anything solid.</p>
<p>My D was involved in an automobile accident a couple years ago that still isn't settled. She a SR this year. </p>
<p>The suit is approaching a conclusion, probably not this year but next. She'll be 18 next spring as well, so any settlement at that point could go straight to her. We have disussed the prospects of a structured settlement for her with the attorney. It seems as if she would still be hit in the financial aid area whether she would go with a lump sum or a structured settlement. Basically, the money that would go to make her life more comfortable is going to be earmarked for college at the rate of 20% a year if I understand correctly as an asset (SS) or 50% if she takes it as a lump sum, then 20% each year after that as an asset? One one hand, they would probably expect more in EFC from her than she'd be bringing in, and on the other, it would be there, but it 68% of it would be gone by her 4th year if it misses her SR year of HS.</p>
<p>I know the suggestion is going to be to contact an attorney, which we are trying to find a second one that will be an expert in this area (FAFSA Lawyer???). Obviously the one we have now isn't real clear on things. Apparently, not his area of expertise working with minors and FAFSA. He is the one that suggested the structured settlement as a way to keep the money out of her hands, but obviously that doesn't work. Our tax guy doesn't really know either, after all, it isn't taxes. I see in the FAFSA that it asks for all trusts, etc, regardless of whether the monies are accessible or not. Surely we aren't the first ones to find ourselves in this spot. Even annecdotally, what have others who have been in this spot done? I know her freshman year will be in the clear, but by sophomore year I think she's going to get hit. We're not talking about a lump value of hundreds of thousands here BTW, I am guessing that after everything is paid off like medical bills and lawyer, it will be in the $40-60K range, which while not a lot to many on CC is a lot for us. </p>
<p>I guess one point of contention is if it is an asset or untaxed income. If an asset, she could always just buy a car or something to make sure she keeps something out of it. I don't see how it could be considered income more than once, after that what was left would be an asset. Of course, if she has a trust worth $50K at the end of the year but has taken payments of $5K during the year, I guess she's hit for both? Don't know if she could assign it somehow to us as parents or not for a lower contribution rate? Or just bite the bullet and let the school gobble it up?</p>
<p>Late EDIT: Did anyone looking at this just decide to take the lump sum up front and invest it or do something else with it themselves? In that case, for the year in which it is received, did that mean that half of the settlement was alloted for EFC from the student?</p>
<p>Man, this is more confusing than the rest of the financial aid process combined, and that's saying something.</p>