<p>I attend a very expensive top 20 private university. Im middle class with an a average family income at about 65 thousand. I work and have an income at about 8 grand a year. I wanted to place a family timeshare in my name to help build my credit. It cost about 15,000 dollars. I was wondering would this negatively affect my Aid. My EFC last year was about 10,000.</p>
<p>Thanks in advance for any possible advice</p>
<p>There’s a lot cheaper ways of building credit.</p>
<p>Bad bad idea. Any property you own will be counted as an asset, and would definitely have a negative impact on your FA.</p>
<p>You are better off leaving it in your parents’ names - they have a much better asset protection than you. If you put it in your name, the student component of your EFC will shoot up. Check an EFC calculator to see the change.</p>
<p>Yes it will affect your aid. A $15,000 asset in your parents’ name will be assessed at 5.6%. It will reduce the amount of aid for which you are eligible by about $840. A $15,000 asset in your name will be assessed at 20-25%. It will reduce the amount of aid for which you are eligible by about $3,000-3,750. So if you’re otherwise eligible for need-based aid, you’d likely be giving up around $2,000-3,000 in aid each year for four years. That’s $8,000 - 12,000. Not a good idea.</p>
<p>I would think the value to be declared on the FAFSA for a time share would he the resale value which could be much less than the purchase price.</p>
<p>I already posted my reply to your same post on the financial aid forum. I would suggest you NOT do this. There are plenty of other ways to build credit…one being NOT to overuse it. Owning a timeshare will certainly red flag your financial aid application. Someone will want to know how and WHY a student from a family with limited means has a timeshare in THEIR name. </p>
<p>The reality is that this needs to stay with the parents…and YES the equity in that timeshare will be considered an asset on the FAFSA and Profile (regardless of who owns it).</p>
<p>Don’t buy a timeshare from the developer. You can pick them up on the resale market for 10 cents on the dollar. You can spend $1,500 for that timeshare that costs $15,000 from the developer.</p>
<p>Aside from that, it is a terrible investment anyway. Unless, you plan on going there every year at the same time. Then it can be quite reasonable.</p>
<p>I agree with you about timeshares, OperaDad. Don’t own them and don’t plan to own them ever. But I do know friends who swear by them. They can switch their location and time for other locations and times, so they are not going to the same place every time.</p>
<p>We are trying to figure out what to do with 2 pieces of property my MIL owns. She wanted to put them in my sons’ names, but we nixed that idea for the above stated reasons. Then she wanted to put it in our names, but we didn’t want any more assets on our “record.” She is trying to avoid some potential problems upon her death.</p>
<p>Someone suggested she “will” it to the “XXX Family Trust.” That way it goes to us upon her death, but it isn’t “ours” until then.</p>
<p>Would that work??? This stuff just really baffles me.</p>
<p>If you are a beneficiary of the trust, your value must be listed as an asset on the FAFSA…we went through that in our family last year.</p>
<p>thanks thumper. What if she just leaves it to us in her will - without mentioning a trust? </p>
<p>PS - I am asking because we head up there on Friday and I KNOW this topic is going to come up!!!</p>
<p>If SHE owns the property, it is in HER name, not yours. Re: a trust, you really need to talk to a lawyer who specializes in trusts. My understanding (I am NOT a lawyer who specializes in trusts) is that IF you are a beneficiary of the trust AND the trust has a value (in other words, the properties have been transferred into the trust), you MUST declare your share of the value on the finaid forms. If your parent is looking for a tax advantage, I believe they must transfer the property and deal with that. Otherwise, they may as well just hold title to the properties and deed them to you upon their death. Clearly, they want some kind of tax advantage now.</p>
<p>I think she is just trying to avoid issues with other family members later. Will need to talk to her this weekend…DH avoids these things even tho it’s his mother!</p>
<p>Thanks!</p>
<p>In order for her to “will” something to “the XXX family trust,” there has to be an XXX family trust, or (usually less preferably) her will has to create said trust. There are many kinds of trusts with varying tax, gift, probate, and legal ramifications. She should see an attorney who specializes in wills and trusts.</p>
<p>If it is a simply living trust, say “the old grandma family trust” and she controls it or it is controlled on her behalf and she would have to die for them to get it, i don’t believe it would be a fafsa asset.</p>
<p>It is not theirs, it is not in a trust with them as the active beneficiary, they are future beneficiaries.</p>
<p>Consult a lawyer… beneficiaries of trusts MUST list the asset value (if there is one) of their share of the trust as an asset on the FAFSA. If there is some way to make the trust so that the parents AND the student are NOT beneficiaries until the parent dies, then maybe that would work. I’m not sure you can set up a trust without beneficiaries. Consult a lawyer.</p>
<p>Oh and by the way…if the parent AND the student are named beneficiaries…BOTH have to list their value of the trust on the FAFSA…even if they have NO ACCESS to the value.</p>
<p>Oh - I knew this was going to be a big mess when she first mentioned it to me.</p>
<p>Groan…</p>
<p>I think you should ask the attorney if it can be the grandma living trust with Grandma as the beneficiary and you as the secondary beneficiary, that way she is the beneficiary</p>
<p>Perhaps at least until after 2010 or new estate planning laws are set up this would work?</p>
<p>Financial aid is suppose to be for those whose choices are putting food on the table or paying tuition. If you have a timeshare, obviously putting food on the table is not an issue. No FA for you.</p>