learners4life Posted January 27, 2017 Share Posted January 27, 2017 I am filling out the forms for financial aid. I know we don't qualify for anything through FAFSA, but understand it needs to be filled out even for other aid. In looking at things, I saw that money saved under the child's name is counted at up to 20% compared to the 6% under a parent's name. At one point in time, I put some of dd's college savings under her name. About $40,000. I realize that was not a good move. Can I now move it (like today or Monday) to a 529 plan? We are in CA, so there is no state tax benefit, and at this late date, what kind of tax benefit would there be at all. The point would be to remove it from her name. Thoughts? Advice? She plans on attending vet school, so we want to lower costs now any way that is legal. Quote Link to comment Share on other sites More sharing options...
Julie of KY Posted January 28, 2017 Share Posted January 28, 2017 If it's "your" money that is in her name, then there is nothing deceitful about moving it back to your name. I'd have no qualms about moving the money and then reporting it as it is after moving it. Whether you move it to your savings or a 529 is up to you and I'm not sure of the details of opening a 529. I think the main benefit is for money to grow tax-free to be used for education. A question that is asked on some forms is if any of the student's money is held in someone else's name. 1 Quote Link to comment Share on other sites More sharing options...
MerryAtHope Posted January 28, 2017 Share Posted January 28, 2017 I would get advice about doing that if the money is in her name. Everything I've read online says that moving large amounts of money from the student's name to another name will be viewed as trying to hide the money. 1 Quote Link to comment Share on other sites More sharing options...
maize Posted January 28, 2017 Share Posted January 28, 2017 I would seek professional advice from someone familiar with college financing, once the money has been out in her name I believe it is considered hers, and moving it back to your name just in time for financial aid applications may not look good. 1 Quote Link to comment Share on other sites More sharing options...
maize Posted January 28, 2017 Share Posted January 28, 2017 This article seems to suggest that making the transfer would be fine: http://www.fastweb.com/financial-aid/articles/should-parents-transfer-college-savings-from-an-utma-account-to-a-529-plan 1 Quote Link to comment Share on other sites More sharing options...
learners4life Posted January 28, 2017 Author Share Posted January 28, 2017 This article seems to suggest that making the transfer would be fine: http://www.fastweb.com/financial-aid/articles/should-parents-transfer-college-savings-from-an-utma-account-to-a-529-plan Thanks! That was a great article, and reaffirms what I was told yesterday by Vanguard. I decided to call him yesterday shortly before 5:00, as Loyola Marymount's deadline for paperwork is Feb 1. He advised that I could do it all online, except he was not sure that my account wasn't truly custodial. In fact, when I set up this account, I thought I was setting up a custodial. However, when I asked this summer, the credit union told me that it was a joint account, with my daughter as a primary. Our Vanguard rep wasn't sure how that could be, so I went back to the bank right before 6:00, and they verified that it is not a custodial account - UTMA or UGMA. So, I am free to move the money however I want. I'm going to put this bit of money in a 529, but leave the rest of the money alone that I had saved under my name. I'm not sure a 529 will benefit her much at this late date, but we will use that money last and try to earn a little bit on it. A point of information, that might help someone else: if this had been a custodial account, I could still have put it into a 529, but it would have been a 529 owned by my daughter. Right now, the FAFSA rules are such that a 529 owned by a dependent student are treated at the same 5.64% rate as parent assets, but I understand that rule has changed anywhere from 0% to 20% in the last 15 or so years. At any rate, don't be as uninformed as I was. It was only good luck, or God leading the hand of the credit union rep, that the account was opened as a joint and not a custodial. Also, there are rules about how much can be given in a year, and for married filing jointly, it is $14,000 per parent for a total of $28,000. There is also a rule in which $70,000 can be given, but it is a one time deposit, and the parent is disallowed from contributing more to the account in the future. (Not sure if they could get around it by opening up another account.) Disclaimer: I'm pretty confident I have the above info correct, and it seems verified by Maize's article, however please check with someone in the know! 2 Quote Link to comment Share on other sites More sharing options...
Arcadia Posted January 29, 2017 Share Posted January 29, 2017 (edited) There is also a rule in which $70,000 can be given, but it is a one time deposit, and the parent is disallowed from contributing more to the account in the future.It is a $70k limit every 5 years without incurring gift tax. You can contribute $70k and your husband can contribute $70k. The limit is per giver per child. From Ameriprise "For example, if you contribute $70,000 to your son's 529 account in one year and make the election, your contribution will be treated as if you'd made a $14,000 gift for each year of a five-year period. That way, your $70,000 gift would be nontaxable (assuming you didn't make any additional gifts to your son in any of those five years). If you contribute more than $70,000 ($140,000 for joint gifts) to a particular beneficiary's 529 plan in one year, the averaging election applies only to the first $70,000 ($140,000 for joint gifts); the remainder is treated as a gift in the year the contribution is made." https://www.ameriprise.com/research-market-insights/financial-articles/insurance-estate-planning/estate-planning-and-529-plans/ Edited January 29, 2017 by Arcadia 1 Quote Link to comment Share on other sites More sharing options...
JanetC Posted January 29, 2017 Share Posted January 29, 2017 If you aren't getting aid, no need to move the money. Or, are you on the borderline for qualifying for something? Quote Link to comment Share on other sites More sharing options...
learners4life Posted January 29, 2017 Author Share Posted January 29, 2017 If you aren't getting aid, no need to move the money. Or, are you on the borderline for qualifying for something To tell the truth, I never even thought about aid before this year. I just robotically saved for college. I knew a couple of people whose children got some small amount of aid, not much, from Berkeley, and thought I'd look into it - I had no idea what to expect. I did a couple of the online calculators, and didn't qualify for anything, but none of these other families had qualified either. Then I read that the FAFSA must be filled out as part of the process of merit aid as well. I don't know what good this whole process will do. I spoke to my brother-in-law, who has grown children, and he said they went through the whole process with all three kids and never got a cent - and one of his sons went to Stanford plus they had multiple children in college at a time. However, that was a number of years ago. I don't expect we'll get anything, but I've heard some crazy stories, so thought I'd give it a basic try. At least at the private universities dd applied to. Although, today, I saw that USC also wants applicants to fill out the CSS and I've just about hit my limit on paperwork. Quote Link to comment Share on other sites More sharing options...
Arcadia Posted January 29, 2017 Share Posted January 29, 2017 To tell the truth, I never even thought about aid before this year. I just robotically saved for college. I knew a couple of people whose children got some small amount of aid, not much, from Berkeley, and thought I'd look into it - I had no idea what to expect. I did a couple of the online calculators, and didn't qualify for anything, but none of these other families had qualified either. Then I read that the FAFSA must be filled out as part of the process of merit aid as well. It might be UCB's Middle Class Access Plan scholarship. "The Berkeley Middle Class Access Plan (MCAP) is an innovative financial aid scholarship program to help middle-class families afford the cost of an undergraduate degree. For families whose total income ranges from $80,000 to $150,000 annually and who have typical assets, the ground-breaking plan caps the contribution parents make toward the annual cost of a UC Berkeley student's education at 15 percent of their total income. Please note that students who are not California residents, although eligible for an MCAP award, will not be eligible for UC grants or scholarships, including MCAP scholarships, to cover their nonresident supplemental tuition and fees ($26,682 in 2016-17). We encourage eligible families of both currently enrolled and prospective students to submit a Free Application for Federal Student Aid (FAFSA) or California Dream Act Application to be considered for the Berkeley Middle Class Access Plan. Please note: UC Berkeley's Middle Class Access Plan is different from the State of California-sponsored Middle Class Scholarship. Receipt of a Middle Class Scholarship may affect your total Middle Class Access Plan scholarship award from UC Berkeley." http://financialaid.berkeley.edu/middle-class-access-plan 1 Quote Link to comment Share on other sites More sharing options...
learners4life Posted January 29, 2017 Author Share Posted January 29, 2017 It might be UCB's Middle Class Access Plan scholarship. "The Berkeley Middle Class Access Plan (MCAP) is an innovative financial aid scholarship program to help middle-class families afford the cost of an undergraduate degree. For families whose total income ranges from $80,000 to $150,000 annually and who have typical assets, the ground-breaking plan caps the contribution parents make toward the annual cost of a UC Berkeley student's education at 15 percent of their total income. Please note that students who are not California residents, although eligible for an MCAP award, will not be eligible for UC grants or scholarships, including MCAP scholarships, to cover their nonresident supplemental tuition and fees ($26,682 in 2016-17). We encourage eligible families of both currently enrolled and prospective students to submit a Free Application for Federal Student Aid (FAFSA) or California Dream Act Application to be considered for the Berkeley Middle Class Access Plan. Please note: UC Berkeley's Middle Class Access Plan is different from the State of California-sponsored Middle Class Scholarship. Receipt of a Middle Class Scholarship may affect your total Middle Class Access Plan scholarship award from UC Berkeley." http://financialaid.berkeley.edu/middle-class-access-plan That might have been it. I know the dad of one UCB freshman told me his son got money from two different sources through UCB. Quote Link to comment Share on other sites More sharing options...
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