<p>I am confused. I thought that money held in a UGMA account gets listed under the students finances on FAFSA, but on the FAFSA it says to include any monies held as investments in UGMA accounts with the parents investments? Huh..certainly won't include it twice! Whose does it go with...mine or my daughters??? (I know; it should have been converted to 529 but that is another story)</p>
<p>UGMA accounts are listed on FAFSA as student assets, because they are owned by the student. They are not parent assets.</p>
<p>It’s not too late to convert your daughter’s UGMA to a student-owned 529 prior to filing FAFSA.</p>
<p>You are correct–UGMA/UTMA accounts are student assets, except that UGMA/UTMA 529 accounts are listed as parent assets for dependent students (starting this year).</p>
<p>The FAFSA online NEED HELP? has a couple of notes that clarify the confusion on the form:</p>
<p>"Investments include real estate (do not include the home you live in), trust funds UGMA and UTMA accounts, money market funds, mutual funds, certificates of deposit, stocks, stock options, bonds, other securities, installment and land sale contracts (including mortgages held), commodities, etc.</p>
<p>Note: UGMA and UTMA accounts are considered assets of the student, and must be reported as an asset of the student on the FAFSA, regarless of the student’s dependency status.</p>
<p>Investments also include qualified educational benefits or education savings ac****s such as Coverdell savings accounts, 529 college savings plans and the refund value of 529 prepaid tuition plans. Note: Students who must report parental information on this form should report all qualified educational benefits or education savings accounts owned by the parents and/or the dependent student as part of the parental assets in question 92.</p>
<p>Investments do not include the home your parents live in; cash, savings, and checking accounts; the value of life insurance and retirement plans (401[k] plans, pension funds, annuities, non-education IRAs, Keogh plans, etc.)."</p>
<p>Wow – I just checked the 2009/10 FAFSA form and instructions and it is very clear:</p>
<p>FAFSA Page 2
Notes for questions 42 and 43 (page 4) and 92 and 93 (page 7):</p>
<p>"Investments include … UGMA and UTMA accounts, money market funds, mutual funds, certificates of deposit, stocks, stock options, bonds, … "</p>
<h1>“For a student who must report parental information, the accounts are reported as parental investments in question 92, including all accounts owned by the student and all accounts owned by the parents for any member of the household.”</h1>
<p>‘a student who must report parental information’ is a dependent of the parent(s).</p>
<p>I don’t know if this is a mistake on FAFSA’s part, but since it is so unambiguous and clear, I would accept this generous offer and list the child’s UGMA as a parent’s asset.</p>
<p>Only qualified education accounts owned by the student are reported as parent assets. Any other accounts, such as UGMA’s, are reported as student assets.</p>
<p>From the completing the FAFSA instruction</p>
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</p>
<p>And from the FAFSA ‘help’ page</p>
<p>[What</a> is your current net worth of investments?](<a href=“http://www.fafsa.ed.gov/help/fotw33c.htm]What”>http://www.fafsa.ed.gov/help/fotw33c.htm)</p>
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<p>So the form instructions are in error as I suspected. This will create some problems, as some people will only read the form instructions and not read the online help. The link you referred to is kind of buried.</p>
<p>JustDisDadYaKnow,</p>
<p>I’m not sure that those instructions are in error, but they definitely are not clear. “For a student who must report parental information, the accounts are reported…” What accounts? The 529 accounts or the investment accounts. I agree with you–there are going to be alot of student assets reported in the parent section! </p>
<p>Re UGMA/UTMA: The investment definition applies both to parents and to the student. So last year (my first year with FAFSA) I decided (because the instructions were not clear) that parents could have parentally owned UGMA/UTMA accounts (leftover from their childhood, perhaps?–I have no idea if this is really possible) and students could have student-owned, parent as custodian UGMA/UTMA (the usual situation). I believe that the instruction paragraph about the 529 plans and account reporting was added this year (to further muddle UGMA/UTMA reporting).</p>
<p>I did recently have a heated discussion with a friend about reporting 529 accounts. She did not want to believe that she had to report Johnny’s, Susie’s and Billie’s accounts all on Johnny’s FAFSA. Since they were the standard 529 accounts (parentally owned), they were all parental assets and that instruction phrase “all accounts owned by the parents for any member of the household” applied.</p>
<p>That’s funny Lunar_eclipse about your friend. Maybe when she calms down she’ll figure out it’s better to assess 3 kids at 5.6% each (with asset protection) than each one at 20% (without asset protection).</p>
<p>This has come up before. The form instructions aren’t technically in error, but they are confusing.</p>
<p>The FAFSA form instructions are trying to be helpful by defining “investments.” They use the same definition of investment, which includes UGMA accounts, in the section for reporting Student assets, as they do in the section for reporting Parents’ assets.</p>
<p>So they’re just defining what they consider to be an investment in that particular sentence accompanying Q42-43, not commenting on the ownership of that investment.</p>
<p>It’s confusing, and they should probably clear it up.</p>
<p>FWIW, if the adult listed on the UGMA account dies, the UGMA assets are included in the estate, especially for tax purposes. Makes no sense, but then again, we are not the ones making the tax laws.</p>