A 529 account that is actually owned by the student’s sibling (i.e. not owned by the parent, even though the parent may be acting as custodian for the minor sibling) is not reported on the student’s FAFSA or Profile. These accounts are typically funded with UGMA/UTMA money, and the beneficiary (the sibling) cannot be changed as long as the sibling is a minor and unable to legally control the account.
A 529 account for the student’s sibling that is actually owned by the parent with the sibling named as the beneficiary is reported as a parent asset on the student’s FAFSA and Profile, because the parent controls the account and can change the beneficiary at any time.
A 529 account that is actually owned by the student is reported on FAFSA as a parent asset (if the student is a dependent for FAFSA purposes, otherwise it’s reported as a student asset), and is reported on Profile as a student asset in question SA-110A. Profile colleges can assign the account as a student or parent asset as they wish, consistent with their institutional FA policies.
The purpose of the question about parents holding assets in the name of siblings is to find parent assets that really belong to the parent but have been retitled in the name of a minor in an effort to reduce income taxes. With the beefed-up kiddie tax rules this is not as common as it used to be. The question is not asking about assets that legitimately belong to minor siblings, such as inheritances, gifts and UGMA/UTMA funds that may be under parental control until the minor reaches the age of majority.