Steve Blank
Guest
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| Posted: Thu Jan 27, 2005 8:17 am
Post subject: Re: Grantor Trust included in assets of Student |
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dewitt492@AOL.COM wrote:
| Quote: | My son has a grantor trust with about 40k in it. He does not have
access to those assets until he turns 25. Is this includible as an
asset on his FAFSA?
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You've opened a complicated legal question. Grantor trusts can have many
complexities, as I found when I did a Google search to learn more about
them. Apparently the Grantor can retain the right to income from the
trust and even revoke it - depending on the wording of the trust documents.
Generally, if a trust is irrevocable it probably is a student's asset
for the FAFSA, even if he has to wait until 25 or whatever age to get
it. The value of a future trust is determined by computing the net
present value, or what a disinterested third party would be willing to
pay now for the student's right to collect it many years from now.
If it is revocable by the grantor, in other words the student really has
no legal right to it and may never actually get it, then a third party
would probably not be willing to pay a dime for it because of the risk.
Because of the variables, you probably should get an attorney to review
all the aspects of the trust and go with his/her opinion.
Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761 |
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