<p>Hi. Sorry if this has been answered elsewhere -- if it has, I can't find it and apologies.</p>
<p>My son will be only 17 when he enters college as a freshman this fall (2014) although undecided as to where and waiting to hear back from a few schools.</p>
<p>He has a UTMA his father (my XH) started several years ago which now has enough $ in it to substantially affect his EFC. However, the age of majority in our state (PA) for UTMAs is 21 which means he cannot access the funds until then. Theoretically, he will be halfway through his senior year by then. </p>
<p>Given that he (my son) can't access the money to help pay for his own education (which he would gladly do) for reasons beyond his control, are we still obligated to declare the UTMA on any/all financial aid forms? If so, I understand 20% is the expected contribution as the asset in his my son's name, but since he can't access it, how can this factor in?</p>
<p>Not trying to cheat the system, but am having difficulty with the rationale EITHER way. I imagine several parents are in a similar situation...</p>
<p>Yes, he is still required to report it. It is the same for trust accounts that a person can’t access - it still has to be reported as an asset. Probably set up because of abuses in the past where people hid assets (not saying that is your situation, but many of the rules grow out of past abuses). Or the thinking might be that with a substantial asset, the person can afford to borrow and pay off later.</p>
<p>Whatever the rational, it must be reported.</p>
<p>It has to be reported as his asset even if he can’t access it (oldest d had a small one and we had to do the same )</p>
<p>Ugh. Thanks (both of you). That’s sort of what I was figuring (dreading) but was clinging to a shred of hope. </p>
<p>My son can’t access it and neither can I (e.g., to roll it into a 529 or even a savings account… something we can use now… even if it means taking a tax hit) since XH is the custodian - and XH has NO intention of helping out with college. This is a nightmare!</p>
<p>And - just as an aside — whoever came up with that ridiculous EFC calculation must be completely insane or on crack (just venting).</p>
<p>But, if the asset still exists, when your son reaches the age where he can access the money, your xH cannot stop him from doing so. </p>
<p>Sounds like XH is a jerk. The UTMA money can only legally be used for your son’s benefit. Has XH used some of the money for anything already, or indicated that he plans to spend any (more) of it before your son turns 21? Would it do any good for you son to talk to his father, and tell him that the common sense thing to do is to use the money for college expenses while XH still has control, instead of turning over everything to your son on his 21st birthday, with the possibility that he will use the money to buy a car, rent a condo in Maui, or worse? If that fails, at least you will know that there will be a source of funds to pay back educational loans before your son graduates.</p>
<p>You are all so helpful – thank you!</p>
<p>XH claims (now that he’s remarried) all his money has to go toward his wife’s health issues (resulting from 3 packs a day). He won’t deal with distributions/withdrawals from the UTMA mostly out of laziness and stubbornness - not malice. And since I make a little (keyword: LITTLE) more than him, he assumes I can and will cover all college costs and expenses.</p>
<p>I know it sounds like I live in denial or with my head in the clouds, but I know these both are true: 1) despite his faults, XH hasn’t accessed it - he wouldn’t, and 2) my son wouldn’t do anything foolish with it even when he can access it himself. He’s more financially aware/ responsible than most adults I know. I’m positive of that.</p>
<p>Thank you, 4kidsdad, for the tip. I will definitely pursue that!! This could very well make the difference in which school we can afford. Bless you.</p>
<p>I’m usually against loans, but if your son knows he’s getting this money shortly before or after graduation, he can borrow the money and then pay it all back as soon as he graduates. Not ideal, but it will work.</p>
<p>Financial aid offices have some leeway on their rules/calculations when they understand your circumstances. I would write them a letter explaining the circumstances of the account. That legally your son can’t access it until he is 21, and his father (custodian) refuses to make distributions for any purpose (assuming that is the case). So although the money appears to be available for education expenses, unfortunately it is not. And ask them to please take this information under consideration when calculating your son’s FA. Some FA offices have hearts of stone (could name one for sure, but won’t…), but others may give at least some more aid than they normally would.</p>
<p>I would still contact a lawyer as well, though.</p>