<p>Grandparents started a 529 plan for grandson, the student. Grandparents died and parents now are identified as Successor Participants, with grandson as Primary Beneficiary. If grandparents still were alive, I understand that neither parents nor grandson would have to identify the 529 plan as an asset (because it would be the grandparents’ asset?). With the grandparents deceased, must the parents list the 529 Plan as an asset?</p>
<p>Interesting question. Since the parent is the successor participant, he or she essentially “owns” the 529, isn’t that right? If so, it would need to be reported on Profile as a parent asset. And presumably the parent could designate a different beneficiary to the 529, just like a normal parent-owned 529.</p>
<p>Here’s what Fidelity says:</p>
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<p>Here’s from the Profile instructions:</p>
<p>Q: What are Section 529 college savings plans? Should assets from these plans be reported on the PROFILE Application?</p>
<p>A: The term “Section 529 Plan” is another phrase for Qualified Tuition Plans (QTP). These are savings plans that allow parents, other relatives, and even non-relatives to save funds each year for college expenses for a designated beneficiary (the student who will eventually attend college).</p>
<p>QTP’s fall into one of two categories: College Savings Plans or Prepaid Tuition Plans. All 50 states sponsor at least one type of QTP.</p>
<p>College Savings Plans are fairly simple, although investment options will vary from state to state. The owner of the plan deposits funds into the account and when the beneficiary enrolls in college, those accumulated funds (principal plus interest) may be withdrawn to help pay for each year of the beneficiary’s college expenses.</p>
<p>Prepaid Tuition Plans allow the family to purchase “shares” of tuition costs for a designated beneficiary. These plans allow the family to “lock in” future tuition charges at today’s rates.</p>
<p>Since these plans represent an asset - a savings account of a sort - they must be reported on the PROFILE in PA-120 if the parent is the owner of the plan established for the student or the student’s brothers or sisters.</p>
<p><a href=“https://profileonline.collegeboard.com/prf/1application_faq.jsp#Top[/url]”>https://profileonline.collegeboard.com/prf/1application_faq.jsp#Top</a></p>
<p>*With the grandparents deceased, must the parents list the 529 Plan as an asset? *</p>
<p>Wasn’t the purpose of the fund to pay for your kid’s college costs?</p>
<p>Yes, the grandparents set this up for his college costs, but if they still were alive, neither DS nor I would have to identify it as an asset. It would be an asset of the grandparents and therefore I understand would not factor into the EFC calculation based on parents’ assets, even if it were going to be used for DS’s education.</p>
<p>You have to declare it as an asset because you have the money now - it’s available for your child’s college costs. Even if they hadn’t set up a 529, you would have inherited the money and still would have that asset. </p>
<p>Unless you’re low income, this asset may not matter that much. Typically, once you earn enough not to qualify for “free money,” your aid is really just student loans - which you may not have wanted anyway. </p>
<p>If you didn’t have this asset, would you qualify for “free money” (Pell, etc). Your income would have to be rather low.</p>
<p>We were in a somewhat similar situation when I inherited some money. Even without the inheritance, we wouldn’t have qualified for any “real aid” (I don’t consider “loans” as “real aid.”) Yes, if my uncle hadn’t died, he would have had the money, and I wouldn’t have had to declare it. But, he died, left me some money, and now it was in my hands. </p>
<p>Have you tried using an EFC calculator to determine what difference this asset makes? You could first try the calculator with the asset, and then do it without the asset. <a href=“http://www.finaid.org/calculators/finaidestimate.phtml[/url]”>http://www.finaid.org/calculators/finaidestimate.phtml</a></p>
<p>Royal73, in your thread title you mention the CSS Profile.</p>
<p>It is true that if the grandparents were still living and were the owners of the 529 account, you would not be required to report it on the FAFSA. However, the CSS Profile does ask if the student is a beneficiary of any trusts, 529s, or other accounts held by persons other then their parents. So, in the case of the Profile, it would have had to be declared regardless even if the grandparents were still living.</p>
<p>'rentof2 that was my initial understanding as well, that grandparent-owned 529s were reportable on Profile (but never on FAFSA). In fact, when I filled out the Profile last year, I know I included the 529 that my parents opened for my son. I started writing that in my response above, and then thought I should go check the 2010-2011 Profile instructions. They would indicate that trusts held by others for the benefit of the student are reportable, but not grandparent-owned 529s.</p>
<p>Looking one more time, here are the instructions (we’re not talking about a UGMA 529, so that sentence doesn’t apply to the OP):</p>
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<p>Interesting, vballmom! The reference in the 1st paragraph seems to be addressing student-owned 529s, and says to list them as parent assets (in this way, they’ll be considered the same way any parent asset is, sort of similar to the way FAFSA treats them, but of course Profile schools can treat parent assets differently.)</p>
<p>The instructions for SA-170A are definitely news to me and good to know. We don’t have that issue in my family, but this question sometimes comes up here on CC and also once in a while from kids at the high school where I volunteer. Thanks!</p>
<p>I also recall …isn’t there some question about whether someone else would be paying for college costs? Or something like that?</p>
<p>Just to clarify, student-owned 529s, also known as UGMA/529s or custodial 529s, are reported as student assets on Profile (they’re parent assets on FAFSA). That’s what this sentence is referring to (and is not relevant to the OP):</p>
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<p>These are 529s that have typically been created using UGMA/UTMA funds that were owned by the student to begin with and transferred to a tax-advantaged 529. These are different from parent-owned 529s, which are reported as parent assets on both FAFSA and Profile. Student-owned 529s must be used to pay educational expenses for the student him/herself, while parent-owned 529s can have a change of beneficiary to another child if the parent desires.</p>
<p>I don’t see a question on Profile for other sources of college funding, but I remember a question like this for FAFSA.</p>
<p>One way or another, for us, the 529 Plan gets picked up and would have if grandparents/original owners were alive. As successor custodians, I assume it’s reportable as a parent asset, and for the schools DS is applying to there are supplemental questions about resources and 529 plans. E.g., a SQ on Profile is “Enter the total value of assets held in Section 529 college savings plans that were established for the student by someone other than the student’s parent(s).”</p>