<p>If the kids are already in school you might ask each school how they view it. It seems some schools do not view the proceeds as income, but rather as an asset. If that were the case w a FAFSA school, you could do thibgs like payoff your home and other debts, then declare only the remaining funds.</p>
<p>Another question to ask is if you take an annuity settlement. As I understand it, the lump sum in the annuity does not get entered on FAFSA, so it would only be the income received which you would disclose, with a deferred annuity, that could be zero.</p>
<p>Profile schools will have their own rules</p>