Living/Family trust

oxnard · 10-13-2009, 02:02 AM

I would llike to find out what you can suggest me. I have been planning to prepare a living trust. I have one amost 18 years old son who is a student at the University of CA. I am wondering what would be the impact for him when applying for financial aid. Would fafsa look at a family trust as a way to avoid assistance or how about having a home owned by a undergraduate student? Any help and ideas?

Thanks so much.

swimcatsmom · 10-13-2009, 09:43 AM

A trust is not protected in the FA process but must be reported as an asset on FAFSA.

Quote:

Voluntary restrictions on access to principal are insufficient grounds to justify disregarding an asset. Section 480(f) of the Higher Education Act clearly indicates that trusts are considered assets. It also indicates that time deposits and tax shelters are considered assets.

Income has a much higher impact on the FAFSA EFC than assets.

ebeeeee · 10-13-2009, 05:08 PM

I have an idea. Pay your kid's tuition. You can obviously afford it.