Financial Aid Question

[CJane]

What is the name of your state (only U.S. law)? MO, but possibly irrelevant.

I know this is a ways down the road...

Wild has an investment fund that is currently under the UGMA and has her father's name on it as well. I'm unaware of the total amount of the fund, don't really care.

--- How does something like this affect financial aid for college? ESPECIALLY if her Father does NOT release it from UGMA upon her reaching her majority (something I'm fairly sure will be held over her head once she ages out of our court order)

If Wild and Unruly live primarily with SuperEx and HisLovelyWife for their senior year in high school, will they then use his financial info on the FAFSA?

--- What is the time frame we should be looking at for this? 12 months, one semester, the summer? Wild will 'age out' the December of her senior year, Unruly in March of her senior year. Financial aid will be a necessity in their college plans, of this I am certain.

I know we address the whole FAFSA as it relates to custody thing every year around June, but these questions are driving me crazy. Nevermind that college for Wild is at least 6 years away...

 

[Ohiogal]

Try http://www.fafsa.ed.gov/ for these questions and many more

 

[TinkerBelleLuvr]

--- How does something like this affect financial aid for college? ESPECIALLY if her Father does NOT release it from UGMA upon her reaching her majority (something I'm fairly sure will be held over her head once she ages out of our court order)

Not like he has a choice here - BY LAW, the child gets the account. Period. I have a child who technically has a right to her account, but, she doesn't want to be bothered. The money is HERS. We are just letting it sit there cuz the market is tanked right now. But, by LAW, if she wants control, it's hers.

 

[TinkerBelleLuvr]

http://www.finaid.org/savings/ugma.phtml

To establish a custodial account, the donor must appoint a custodian (trustee) and provide the name and social security number of the minor. The donor irrevocably gifts the money to the trust. The money then belongs to the minor but is controlled by the custodian until the minor reaches the age of trust termination. (The age of trust termination is 18 to 21, depending on the state and whether it is an UGMA or an UTMA. Most UGMAs end at 18 and most UTMAs at 21, but it does depend on the state.) The custodian has the fiduciary responsibility to manage the money in a prudent fashion for the benefit of the minor. Custodial accounts are most often established at banks and brokerages.


Missouri is 21.

 

[TinkerBelleLuvr]

What is the name of your state (only U.S. law)? MO, but possibly irrelevant.

I know this is a ways down the road...

Wild has an investment fund that is currently under the UGMA and has her father's name on it as well. I'm unaware of the total amount of the fund, don't really care.

--- How does something like this affect financial aid for college? ESPECIALLY if her Father does NOT release it from UGMA upon her reaching her majority (something I'm fairly sure will be held over her head once she ages out of our court order)

See earlier post.

If Wild and Unruly live primarily with SuperEx and HisLovelyWife for their senior year in high school, will they then use his financial info on the FAFSA?

It goes with the parent with whom they resided the most in the past 12 months.

--- What is the time frame we should be looking at for this? 12 months, one semester, the summer? Wild will 'age out' the December of her senior year, Unruly in March of her senior year. Financial aid will be a necessity in their college plans, of this I am certain.

I know we address the whole FAFSA as it relates to custody thing every year around June, but these questions are driving me crazy. Nevermind that college for Wild is at least 6 years away..

I had an unusual case with FAFSA (NCP) - they look at me, but that has to do with dad not filing tax returns and WHO provided more than half of her support.

 

[wileybunch]

CJane, this may not be at all helpful, but wanted to say that my oldest graduated with her BA in 2004 (she hadn't been a dependent in several years at this point), her MA in 2006, married in 2007, and I still have to provide my income/asset info (and my DH's) because of scholarship opps she's pursuing for law school. In your case, SuperEx will be the one responsible for filling out the FAFSA (with his and his DW's info) if she lives primarily with him her senior year. In my DD's case, I think at that point all those rules go off the table and it's probably whichever parent is willing to divulge the info!

 

[CJane]

Well, here's the deal. I KNOW that he had significant UGMA accounts when we married. (We were 21/22 at the time). When we divorced at 29/30, some of those accounts were STILL IN HIS FATHER'S CONTROL because his father would not release the paperwork (shares?) for the accounts to be switched over. We paid taxes on that crap for YEARS and we (he) never had access to any of it.

Law or not, I can absolutely see him telling Wild "Well, you live with me, go where I tell you to go to school and major in something I deem worthwhile, or you can't touch it. But you WILL pay taxes on it."

So whatever... we'll burn that bridge later.

I'm mostly interested in how the dividend income from that/those accounts will affect her financial aid for college.

She's already very clear on where she wants to go/what she wants to major in, how to advance towards a very specific career. Thankfully, the school isn't terribly expensive and it's not too far away. Probably, she could live at home and commute to school. I just think it's craziness that if he has primary for the 12 months prior to her starting college, she loses out on all the 'benefits' of me being poor.

 

[wileybunch]

I'm confused ... is Wild the named minor on the UGMA and Dad is the custodian? If so, the account is hers once she reaches the age of majority. Dad doesn't have any say-so in what she does with the $.

 

[LdiJ]

I'm confused ... is Wild the named minor on the UGMA and Dad is the custodian? If so, the account is hers once she reaches the age of majority. Dad doesn't have any say-so in what she does with the $.

She was making the point that the ex had accounts like that that were his, and HIS father was still controlling them when he was 30.

However, its also possible that he was allowing his father to control something that his father had no right to control, or that the terms of the trust were non-standard.

 

[wileybunch]

She was making the point that the ex had accounts like that that were his, and HIS father was still controlling them when he was 30.

However, its also possible that he was allowing his father to control something that his father had no right to control, or that the terms of the trust were non-standard.

He had to have been "allowing" it (though that's a loaded word!) because the father did not legally own those accounts at that point.

 

[CJane]

He had to have been "allowing" it (though that's a loaded word!) because the father did not legally own those accounts at that point.

Well, this is a bit off topic, but there were a few things at play.

1) The fund would only remove the trustee (his father) from the account upon presentation of SH's birth cert AND the original shares. Sr. SH would not release the shares, the fund would not convert the account REGARDLESS of SH's age.

2) SrSH was never very upfront about what existed where - every single year of our marriage, we'd get an 'oh by the way' letter that included a 1099 from an account SH never knew existed.

I will heave the world's hugest sigh of relief once we hit the magic 7 year mark for any tax returns I had to sign off on. You have no idea.

But I suppose my question is answered. When Wild reaches her majority (21 in this state) she will LEGALLY have access to any/all funds currently under the UGMA... Good to know.

And, if she lives primarily with me for 12 months prior to applying for student loans, it's MY income and not her father's that will be in play. Also good to know.

And in 2 years, I won't have to worry about SH's tax returns coming back to haunt me.

 

[wileybunch]

And, if she lives primarily with me for 12 months prior to applying for student loans, it's MY income and not her father's that will be in play. Also good to know.

I think if you are 50/50, that they look at who supported the child more financially. I'm not sure if that factor comes into play at all when you're not in a 50/50 situation. She definitely needs to live with you more her senior year (unless your income takes off or you marry well ).

 

[CJane]

I think if you are 50/50, that they look at who supported the child more financially. I'm not sure if that factor comes into play at all when you're not in a 50/50 situation. She definitely needs to live with you more her senior year (unless your income takes off or you marry well ).

I'm not marrying until after BOTH kids are out of high school... that's like 10 years down the road!

I don't think we'll be 50/50 since she'll be 18 before she graduates. Can't imagine she'd CHOOSE to live like a gypsy at that age. Do I know she'll live w/me as opposed to an apartment in town or whatever? Nope. But I really do feel better when I have a set of scenarios to think about rather than just wondering about things.