Divorced parent with lower income filing FAFSA - UTMA accounts and custody questions

The parent who provides more than 50% of the student's financial support is the one who should complete the FAFSA - regardless of who claims the student on taxes. If your ex provides more financial support since your son lives with him most of the time, he should be the one completing the FAFSA. \n\nAs for the UTMA account - yes, this MUST be reported as the student's asset on the FAFSA. UTMA accounts are legally the child's property and count as student assets, which are assessed at a higher rate (20%) than parent assets (around 5.64%). This could potentially reduce his aid eligibility more than if those funds were in a parent-owned account.

Thanks for the info. So even though I claim him on taxes, if his dad provides more support, his dad should file the FAFSA? That seems weird since I'm the one handling his college stuff. Also, that SUCKS about the UTMA being counted at 20%. I wish I had known that before setting it up! Is there any way to change how that account is structured now to help his aid chances?

Just to add to the good advice above - for FAFSA purposes, the parent who the student lived with MORE during the past 12 months is considered the custodial parent who should file. So if your son spends most time with dad, that's who files regardless of tax dependency. And yes, UTMAs are problematic for financial aid because they're assessed at the higher student rate. Some families convert them to 529s before college, but there are tax implications to consider if you go that route.

So my brother had this same issuse with his ex wife and they DID try to convert the UTMA to a 529 account and got hit with a huge tax bill!!! Be really carefull about doing that without talking to an accountant first. I think they had to pay taxes on all the gains when they did the switch.

idk if this helps but when my parents got divorced my mom claimed me on taxes but my dad had to fill out fafsa bc I lived with him more. They made us use the parent with higher income which sucked bc my dad made like 3x what my mom did. I still got some financial aid tho, just not as much as if my mom had been the one filing

This is exactly what I was worried about! My ex makes way more than me, so if he has to file the FAFSA, my son will probably get a lot less aid. I guess I was hoping that since I claim him on taxes, I could be the one to file. Ugh, this system feels so unfair sometimes.

DEALING WITH THE SAME THING RIGHT NOW!!! The FAFSA uses the parent who provides more financial support AND who the student lived with more during the past 12 months. It doesn't matter who claims them for taxes! My ex and I have been fighting about this for weeks. Also that UTMA account is 100% counted as your son's asset and it will ABSOLUTELY reduce his aid. Honestly with your ex making big money, your son probably won't qualify for need-based aid anyway. The whole system is RIGGED against kids of divorced parents.

While I understand your frustration, the system is actually designed to reflect the student's actual financial situation. If a student primarily lives with and is supported by a high-income parent, that accurately reflects their financial circumstances. It would be unfair if students could strategically choose the lower-income parent just to qualify for aid meant for truly financially needy students.\n\nRegarding the UTMA, you might want to look into legitimate ways to minimize its impact. Sometimes using UTMA funds to purchase necessary items for college before filing FAFSA (computer, education supplies) can be a strategy, but should be done properly with documentation.

I had this exact same issue last year with my daughter. Her dad has primary physical custody but I handle all the college stuff. We were stuck on the phone with FSA for HOURS trying to get answers. After like 8 attempts and getting disconnected repeatedly, I found this service called Claimyr (claimyr.com) that got me through to an actual person at the Federal Student Aid office in like 15 minutes. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ\n\nThe FSA rep confirmed that the parent who the student lived with more in the past 12 months is the one who needs to fill out the FAFSA. In my case, that was my ex, even though I'm more involved with her education. And yes, they told me that UTMA accounts count as student assets at the higher percentage rate.

Thank you - I might need this service! I've tried calling FSA twice already and got disconnected both times. It's so frustrating when you just need a straight answer. I'll check out that site.

does this actually work? i tried calling fsa like 5 times last month and gave up

One additional point about UTMA accounts that might be helpful: Since your son is likely a senior in high school if you're looking at FAFSA now, the timing for using those UTMA funds matters. The FAFSA uses a

That's really helpful advice about the snapshot timing. My son turns 18 in three months, right before we'd need to submit the FAFSA. So theoretically, we could use some of those UTMA funds for his computer and other college supplies right before filing? Would that be legal?

Yes, using UTMA funds for legitimate educational expenses like a computer, supplies, or even college visits is completely legal. The key is that these must be legitimate expenses for your son's benefit, and you should keep detailed records of all transactions. Remember, as the custodian, you have a fiduciary duty to manage these funds in your son's best interest until he reaches the age of majority.

my parents r divorced 2 and my dad makes wayyyyy more $$ than my mom but i got lucky cuz i live with my mom most of the time so she did my fafsa. dad pays child support but that doesnt count for who fills out the form its all about where u physically live most of the year

That does make the situation clearer, thank you! I'm realizing I probably should have planned all this better years ago. Too late now I guess.

Since I haven't seen anyone address your specific situation completely: For the 2025-2026 FAFSA, the parent who provided more financial support AND with whom the student lived more during the 12 months prior to filing should complete the application. If your son lives with his father the majority of the time, and his father provides more financial support (housing, food, etc.), then his father should be the one to file the FAFSA, regardless of tax claiming status.\n\nRegarding the UTMA: Yes, it must be reported as a student asset, assessed at 20% of its value in the SAI calculation. You mentioned $18,000 - that means approximately $3,600 would be added to your son's Student Aid Index, potentially reducing need-based aid by that amount.\n\nSince your ex has \

This is exactly what I needed to know, thank you! I'm going to talk to my ex and make sure he understands he needs to file the FAFSA. Not looking forward to that conversation, but it sounds like there's no way around it. I wish the financial aid system was simpler.

I went through this exact situation with my daughter two years ago! The custody/FAFSA rules can be so confusing when you're divorced. Just wanted to add that if you and your ex have joint legal custody but your son physically lives with his dad more than half the time, then yes, his dad is the one who needs to complete the FAFSA - even though you claim your son on taxes and handle the college planning. One thing that helped us was getting everything in writing with my ex before FAFSA season. We agreed on who would file, how we'd split any parent PLUS loans, and what info each of us would provide. It avoided a lot of drama later when deadlines were approaching. For the UTMA account - definitely consider using some of those funds for legitimate college prep expenses before filing if the timing works out. We bought my daughter's laptop, dorm supplies, and even paid for some SAT prep courses from her UTMA account the month before filing, which reduced the reportable balance.