<p>I need some advice from someone that's very knowledgeable about trusts and CSS profile schools. After 2 financial advisors and 6 months of phone calls, I still can't sort it out.</p>
<p>I would prefer to PM due to the complexity of the situation. Would really appreciate your help before my daughter writes essays to schools that meet full need without loans.</p>
<p>I sent you a PM. But for others…If your daughter is a beneficiary named in a trust…I believe her value of the trust MUST be listed as an asset on the Profile…whether she has access to the funds or not. I know this is true on the FAFSA.</p>
<p>One other comment … after receiving advice from financial consultants I’ve learned to double check if the advice is what the rules say or what we are likely to get away with. In some situations we have been advised to ignore some rules in cases where it is very likely we will not get caught … I’m sort of OK with getting that advice but I was not pleased that I was not told the advice involved breaking the rules.</p>
<p>3togo is correct. Along the way…someone said to us “just don’t put the value of the trust down. How will anyone know? Your SS numbers are not on it anywhere”…AHEM…This was clearly “breaking the rules” and would constitute fraud if you were discovered. Not worth risking financial aid AND an admissions offer, in my opinion. </p>
<p>Always play by the rules and be honest.</p>
<p>Financial planners, trust attorneys and accountants are not usually familiar with finaid rules & guidelines. Definitely read each questions details to ensure you are both completing the paperwork to your best advantage, but not breaking the rules.</p>
<p>Not likely to get caught is not a good reason to fudge;) But there are valid adjustments which can be made pre filing, knowing that the cash in an account must be listed, but the value of a car or home equity is not (FAFSA) means it is perfectly reasonable to use cash for other things before reporting FAFSA assets. </p>
<p>In a small percentage of cases a person who is paying off say $10,000 from cash to pay off car loan or against a mortgage may benefit greatly if their income happens to be low and that reduction in assets allows them to be Pell eligible as some other awards are based on Pell eligibility (SMART, etc)</p>
<p>In most cases people who are worried about moving assets around are not going to have an income low enough to qualify for any aid and will have merely made themselves less liquid right when they need the money.</p>
<p>If the value is such that it could all be used for your DD the first year, be sure to verify that the school will adjust future aid accordingly.</p>
<p><a href=“SMART,%20etc”>quote</a>
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Well not SMART (or ACG) any more. They no longer exist.</p>
<p>We want to be honest and will disclose the trust. It is a joint trust. Will profile schools consider that half is for the younger daughter or all is available for eldest? Also, trustee is considering moving the trust into a 529 plan. He’s consulted with the 529 plan and it can be done within the trust. He can also dispurse the trust and purchase 529 or keep the trust as is. Don’t know if colleges will consider this a student asset and be calculated at the 20% or at the lower rate like a typical 529 is calculated?</p>
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<p>If your daughter is half of the trust, I believe she would ONLY report her share of the trust…1/2.</p>
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<p>I hope someone can answer your questions about the 529. I honestly don’t know anything about them. It would be wonderful if this could be done as a student asset. Hope it can.</p>
<p>Just an FYI…have you run your numbers through an online EFC calculator (institutional methodology) using the numbers both WITH and WITHOUT this trust money? You might want to do so. At some income levels, the family contribution is sufficiently high that adding a trust (for example) makes precious little difference. You may find that you are going through a lot for no good reason if the numbers really are high without the trust monies considered.</p>
<p>I have run the numbers using both methods. If the 1/2 of the trust will count as a 529 (parent asset), her cost of attendance would be around 22K. If 1/2 of trust counts as student asset it is around 30K. Our income is less than 100K. We’ve scrimped and saved since she was a baby so we can cover the 22K with the help of the trust. We can’t pull off the 30K.</p>
<p>*At some income levels, the family contribution is sufficiently high that adding a trust (for example) makes precious little difference. You may find that you are going through a lot for no good reason if the numbers really are high without the trust monies considered. *</p>
<p>This is very true. Sometimes income and other assets are high enough that any financial gymnastics done are for naught.</p>
<p>Texas…regardless…you and your daughter might want to look at some schools where your daughter would garner merit money. If she is a competitive applicant for schools that meet full need (hoping those are the PROFILE schools you are looking at…otherwise you might be asked to pay well above your family contribution anyway)…she would be a good candidate for merit aid at some wonderful schools. Merit aid could be a wonderful thing for someone in your financial situation (often is for families with those $100K incomes).</p>
<p>Does the trust stipulate that half the money goes to each kid? Or is it at the discretion of the trustee?</p>
<p>If the trustee can distribute all of it to one kid if he wants, I think the whole amount has to be reported. It’s the same as money in my bank account - I can’t report only half because I am saving the other half for kid #2.</p>
<p>529 plans are counted as parental assets regardless of who owns them, so it sounds like the best thing would be to push each half into a child-owned 529. Then only each child’s portion will be counted as a parental asset when filling out FAFSA.</p>
<p>Whether to do that inside the trust or outside - I would guess outside, that way there is no chance the whole amount can be counted for one kid on the FAFSA. </p>
<p>Just my opinion.</p>
<p>My understanding is that 529 accounts are treated as a parental asset for purposes of FA – meaning that they are assessed at the parent’s expected contribution rate, not he much higher student asset rate.</p>
<p>If you’ve run a FAFSA calculator to get your $22k/30k numbers, be aware that PROFILE schools may counts assets differently. The “institutional methodology” on the FAFSA website may be close to the real number for a PROFILE school, but each PROFILE school can vary in its assessment criteria.</p>