Second Home and 529 Plan......

Smolenski7
Sat, 08 Aug 2015 14:32:01 +0000

I have several questions about how 2 specific things will affect my children’s ability to receive the most financial aid possible.

1. I own 1/3 of the home my parents live in. It's worth about $350,000 and totally paid off. Will this affect my kids' ability to receive financial aid in any form?

2. I realize that if a parent owns a 529 account up to 5.6% of the value is included in EFC as a parent asset. If grandparents own the account, none of the value is included. This sounds great, and at first I was about to transfer everything into my parents' name, however, then I read that any distributions from that account would count as student income with respect to filing for financial aid the following year. Would it be advantageous to set aside some money in a 529 account in the grandparents name and only take 1 distribution from it to help pay for the last year of college? This way, taking the distribution will never count as student income when applying for financial aid.

Any help with these questions will be appreciated.