<p>I didn't want to hijack the other thread-on trusts</p>
<p>* this ?isn't for me*</p>
<p>A friend needs to set up a trust for her developmentally disabled daughter who has turned 18 ( but will still be in school till 21). this trust wouldn't be for educational purposes but to provide income for the child, incase/when her parents are no longer around or able to care for her.
She is probably going to be able to live in a group type home, but probably not able to work, unless supervised.</p>
<p>I think they have someone that is helping them with that- but he doesn't seem to know how this would be considered for financial aid, for their other child who will be going to college soon.</p>
<p>It seems there should be a way to keep the assets seperate, because while the parents will be able to pay quite a bit of college, that is something that can be paid for with loans etc, while the other child will have the trust as her main source of income( they don't want her sister to have the obigation to support her)
Anyone have any experience with this sort of thing?</p>
<p>As I recall, the financial aid forms asked only if the student or parents own a trust or are beneficiaries of a trust. (This is different than the questions about the 529 accounts, where the parent-owned accounts for all kids are considered.) If the trust for child 1 (the developmentally disabled child) is irrevocable, so that the parents can't dissolve the trust and access the assets, FA shouldn't consider those funds. While the parents may be able to control distributions, those funds must be used for the benefit of child 1.</p>
<p>To be really safe, the parents can make the trust irrevocable, and appoint someone other than themselves to be trustee. That way, the parents not only cannot dissolve the trust, but they don't even control distributions. They no longer "own" the trust.</p>
<p>Of course, any funds that the parents put into the trust during the particular FA year will be considered part of their income.</p>
<p>Your friends may want to ask those questions of a financial aid office at a school that child 2 doesn't really want to go to. That way, they'll get reasonable answers, but won't jeopardize anything for child 2.</p>
<p>Disclaimer: I don't have any specific experience in this area. My response is logically what I believe should be the case, but as we have all learned over the years, there is little that is logical about the FA process.</p>
<p>It may also depend on what school child 2 goes to. FAFSA currently asks for the assets of only the student the FAFSA is being completed for. So a trust in the name of the disabled child should not come into play. However profile may ask for information on the rest of the siblings. I may be wrong (we are not doing a profile school) but I seem to remember reading something about this - probably on this board. </p>
<p>Go to finaid.org and do a search for trusts and the one about 4th down has some useful info. I would paste the link but for some reason the copy/paste function doesn't work any more on my laptop.</p>
<p>I think I remember that profile asks for the assets of siblings.</p>
<p>This exact topic came up about 2 years ago -- no real, solid resolution -- but the general consensus was that the trust would have to be indicated on Profile and then a letter of explanation (with back up documentation) would have to be filed with the FA office explaining the trust.</p>
<p>The person who brought it up 2 years ago had a child who had a trust that came from lawsuit. child had severe mental retardation due to injuries at birth and trust was set up to pay for his living expenses, etc. </p>
<p>This is clearly a legitimate use of a trust and I don't think that any FA office would consider this an attempt to hide or shield funds.</p>
<p>I have a quick question, I'm in college and I just got married and am no longer a dependent under my parents, do i still need their income information when filling our FAFSA?</p>
<p>college_girl06 -- no, you just leave that part blank. you will need to include your spouse's income and assets</p>