How to figure a Kids's Trust for FA documents?

[swimcatsmom]

<p>These are the rules for student assets and about reporting trusts, direct from FAFSA</p>

<p><a href=“http://studentaid.ed.gov/students/attachments/siteresources/CompletingtheFAFSA10-11.pdf[/url]”>http://studentaid.ed.gov/students/attachments/siteresources/CompletingtheFAFSA10-11.pdf&lt;/a&gt;&lt;/p&gt;

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Trust funds. If trust funds are in your (or your spouse’s) name, they should be reported as your (or your spouse’s) asset on the application. In the case of divorce or separation, where the trust is owned jointly and ownership is not being contested, the property and the debt are equally divided between the owners for reporting purposes, unless the terms of the trust specify some other method of division. </p>

<p>How the trust must be reported varies according to whether you (or your spouse) receive or will receive the interest income, the trust principal or both. If you (or your spouse) receive only interest from the trust, any interest received in the base year must be reported as income. Even if interest accumulates in the trust and is not paid out during the year, if you will receive the interest, you must report an asset value for the interest you will receive in the future. The trust officer can usually calculate the present value of the interest you will receive while the trust exists. This value represents the amount a third person would be willing to pay to receive the interest income you (or your spouse) will receive from the trust in the future. </p>

<p>The present value of the principal is the amount a third person would pay at present for the right to receive the principal when the trust ends (basically, the amount you would have to deposit now to receive the amount of the principal when the trust ends, including the accumulated interest). Again, the trust officer can calculate the present value. </p>

<p>As a general rule, you must report the present value of the trust as an asset, even if your (the beneficiary’s) access to the trust is restricted. If the creator of a trust has voluntarily placed restrictions on the use of the trust, then you should report the trust in the same manner as if there were no restrictions. However, if a trust has been restricted by court order, you should not report it as an asset. An example of such a restricted trust is one set up by court order to pay for future surgery for the victim of a car accident.

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