<p>I just learned that my daughter may be receiving some educational trust money. The trust was set up by my husband's great aunt for blood relatives to use for college educations. My daughter nor my husband own the trust. The trust is controlled by an outside trustee. The outside trustee takes the "interest only" in the trust each year, looks at which beneficiaries have applied for educational assistance for that year, and makes a decision how much to give out to each person that has applied. It could be nothing it could be as much as 10K a year - we won't know until a couple of months before school starts in the fall. </p>
<p>This is great news - however, what will this do to the FAFSA and CSS profile. I didn't report it - I don't see how I could have reported since I don't know if we are getting anything yet. </p>
<p>I'm looking at this a bit like and outside scholarship that we may or may not receive. </p>
<p>Has anyone ever been in this situation before?</p>
<p>You need to find out what YOUR child’s share of the value of the trust is. This MUST be reported on the FAFSA…and it is NOT a “fluid number”…the total trust must have a dollar value. This should be divided by the number of beneficiaries, I believe. That is the way the value of a trust is usually reported. </p>
<p>You need to discuss this trust and get this information. The provisions of disbursal written into the trust really have no bearing on what you need to report. If your child is a beneficiary of this trust, you are required to report YOUR child’s share of the value of the trust.</p>
<p>I would suggest you discuss this with an attorney well versed in the trust in question to determine what your child’s share of the value is.</p>
<p>Trusts MUST be reported on the FAFSA (and Profile) whether or not you actually have access to the funds.</p>
<p>I asked the trustee about the value for the FAFSA and she said she didn’t know - nor had she ever been asked for the value from any of the other beneficiaries that have used the trust in the past. The trust ONLY pays out interest -the principal can NEVER be touched. And the trustee has the final say on how much anyone gets each year. </p>
<p>So not only does the total available value change each year (assuming the value is the interest earned - because interest rates go up and down) - the “real” value changes each year since the interest can be split between 0 people each year or 100 people each year. Or not given out at all. For all I know there are millions of dollars there of which my daughter would never see anything. I saw another trust question on this forum that said if you don’t have access to the trust until you are a certain age then you don’t have to report it until you are that age- since you don’t currently have access. Well, we don’t have access to this trust now either. To me access means you could use if you is CHOSE to use it - we don’t have any choice here. We NEVER will have voluntary access to these funds.</p>
<p>I did ask one financial aid officer from a private college (he was at a recent aid night presentation) and he said he would consider it an outside scholarship since we have absolutely no control over any of it…</p>
<p>If it were ME, I would ask for a copy of the trust document. I would take it to my own lawyer with expertise in trusts. </p>
<p>The word “never” is not realistic. I believe there are provisions for dissolving ALL trusts…if the trust is dissolved, the principal WILL be touched.</p>
<p>OK, I got a bit more information. It is a fund set up to give educational scholarships to family members. We have to apply to receive money from the scholarship fund. So it should be viewed as an outside scholarship. I have learned here that colleges may treat scholarship money differently. So I guess we cross that bridge when we come to it after we have our financial aid offers and after we know if we are getting any scholarship money from the fund.</p>
<p>I certainly don’t see why you would have to report anything to FAFSA or CSS. Nobody in your immediate family is actually part of the trust. You may or may not get anything. If you do you would have to report it to the school and probably on next years FAFSA or CSS depending on how the money is distributed. What would a lawyer do at this point except charge you money ? If any of your (your immediate nuclear family) Social Security #'s were associated with the fund you would get a statement every year.</p>
<p>Not true. Our family has a real estate property worth a pretty penny that was placed in trust. We do NOT get any “statements” for this property at all. The property doesn’t generate any income of any kind. BUT it’s value is almost a million dollars. The beneficiaries of this trust are required to list their share of the value on the FAFSA. These beneficiaries do not have the right to sell…or to take out equity loans against the property…doesn’t matter. They are beneficiaries and their share is required to be reported each year on the FAFSA and Profile.</p>
<p>They don’t seem to be beneficiaries of anything unless the administrator decides to send a check and that is based on applying for one. The is the aunt’s trust. What would a lawyer tell you anyway ?</p>
<p>I’m looking at it like you are MisterK. I know that some colleges might reduce our financial aid package because of it. Unfortunately I don’t know right now how much (if any) we will get out of it. So it makes planning and selecting a school a bit difficult… I will obviously report it to the school we have selected once we know how much it is (I would have to anyway because my understanding is they send the check directly to the school). </p>
<p>And we have never had to provide social security numbers or gotten any statements.</p>
<p>Yes, I think that’s the way to look at it. The fact that it’s a trust doesn’t seem relevant; it’s not your trust. Rather, the trust is only an implementation mechanism for the scholarship. In fact, many competitive scholarships are structured that way.</p>
<p>You fit the criteria, but you still need to apply. It’s similar to many other scholarships - for folks from a certain county, or of a certain religion, or for a left-handed tennis player.</p>
<p>OK…it does not sound like your child is a full beneficiary but can apply for funds from this trust. If it were me, I would ask the person managing the trust when decisions about disbursements are made annually. This could help you with your planning.</p>
<p>The way I look at it (I am not a lawyer or accountant or have any legal training), this is like applying for a scholarship with fairly restrictive criteria as also pointed out by MisterK.</p>
<p>You do not know if you will get a scholarship or any money from the trust. You could get this year and not the next. So I would not report it, but when it is awarded, I would inform the school of that and they might adjust the aid. What happens if money is not awarded or they award a nominal amount of $25.</p>
<p>I would not muddy the situation at this stage by mentioning it, but you may want to get legal opinion.</p>