"...the asset is not reported..."

<p>From the New York Times, Choice Blog on Financial Aid...</p>

<p>Mark</a> Kantrowitz Answers Readers' Questions on the Fafsa, Part 1 - NYTimes.com </p>

<p><<We are separated but not yet divorced, and assets are still in joint name. I will be filing 2011 tax return as single and using only my income for Fafsa, but how do I list assets – do I use just 50 percent of everything? - skc</p>

<p>A.Unless there is a legal agreement specifying a different split, ownership of jointly held assets should be divided equally among all the owners. For example, if a student’s parents are divorced or separated, the parent responsible for completing the Fafsa would normally report half of the value of any assets that are jointly owned with his or her former spouse.</p>

<p>If an asset can’t be sold or used as security for a loan because ownership of the asset is being contested in court, like in an acrimonious divorce, the asset is not reported on the Fafsa until ownership of the asset is resolved.>></p>

<p>I'm stunned by the idea that an asset isn't reported when it is being contested in court!? That seems like a tempting loophole. Hubby and I had a good laugh about contesting assets.</p>

<p>That cannot be accurate. Parents would just have to drag a divorce out for a long time (and some of them DO take a long time).</p>

<p>I know, I'm thinking maybe a separation is a good idea!</p>

<p>From the Federal Handbook (Verification Guide):
Contested ownership
Assets shouldn’t be reported if the ownership is being contested. For instance, if the parents are separated and can’t sell or borrow against jointly owned property because it’s being contested, the parent reporting FAFSA information would not list any net worth
for the property. However, if the ownership of the property is not being contested, the parent would report the property as an asset. If ownership of an asset is resolved after the initial application is filed, the student can’t update this information.</p>

<p>Go figure!</p>

<p>Wow. That's all it takes, huh? Nice loophole to keep assets down.</p>