<p>There wont be much interest as the money hasnt been sitting around for long.
But it is a legal manoeuver…but its still only a fraction (regrettably) of total tuition etc whch can be ~$40,000 pa.</p>
<p>I used $11,000 as an example as that is the amount per year that can be gifted to one person without gift tax.</p>
<p>It just makes sense to minimize the childs assets…they are always overstated anyway as for eaxmple an UGMA account will have an asset total which includes capital gains so that the assets could be overstated by as much as 25% depending on the state…NY for example taxes capital gains as income so capital gains are taxed at top marginal income tax rate of the taxpayer…the FAFSA formula (another FIASCO example) doesnt consider taxes to be paid on asset disposition…</p>