I'm sure this topic must have been addressed previously, but I couldn't find it with a search so I'll go ahead and post it here.
My wife and I have most of our savings tied up in retirement accounts and relatively few assets. Our daughters however, had UGMA funds started for them at birth by their grandparents. The funds have done well, so that they each have considerably more in liquid assets than my wife and I do. When the grandparents started this 17 years ago, they had no idea that colleges would tap 5-7% of the parents' assets annually for the EFC, but 30-35% of the students'. Since these funds are in our daughters' names, they have a huge "bullseye" attached to them. If 35% of them are tapped the first year, 35% of the remainder the second year, etc., over 82% of our daughters' inheritance will go to college tuition over four years (unless they lower their college ambitions to schools that will give them scholarships).
One approach to protecting their funds might be spending them down for their own expenses as quickly as possible. Once their UGMAs are exhausted, my wife and I would cover their college costs (taking the 5-7% annual hit instead of the 30-35% one) and gift their saved inheritances back to them incrementally after graduation. I can't imagine that there would be any tax complications with this.
A second approach would be to spend their UGMAs down immediately by having them pay off our mortgage and car loans. That would reduce their contributions to zero and allow us to cover college costs, then restore their assets afterwards. But in such a case, wouldn't we need to pay taxes on the money we'd be getting from them as a "gift?" If so, I'm not sure it would be worth it.