Thank you.
Still confused. I get what the difference is between real sibling assets held by the parents, for example minor sibling won a contest or appeared in a commercial or Great Aunt Edna was so happy little Eddie was named after her that she left him something in her will.
What I do not understand is “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.”
While I am familiar with the over and under 14 rules on the kiddie tax and even in the old days when you could give your kid $2000 per year in their name under a UGMA arrangement. I just do not see how that is different from a Coverdell or 529 plan for the minor sibling?
So under FAFSA, if I take parent money and give $2000 to a UGMA account on behalf of the sibling that is no longer a FAFSA asset? However, if I take the same $2000 and put it in a Coverdell it is???
Also what happens if I have two over 18 in college, have 529/coverdell for each, can I exclude the other ones from each kid’s calculation?
Is there a way to retitle a 529 or Coverdell so I do not have to include them for FAFSA only schools for the siblings? Since my kids will never be independent (probably not even after they graduate!) is there a downside to having the 529 in their name since it is considered a parent asset regardless for that kid’s FAFSA. Would it be considered a student asset on some Profiles?