Do trust fund assets count on FAFSA? Family trust situation

The treatment of trust assets on the FAFSA depends on several factors - mainly who controls the trust, who created it, and the specific terms. For the 2025-2026 FAFSA under the FAFSA Simplification Act, here's what's important: 1. If you are the beneficiary AND can access the principal now (even with your mom's approval), it counts as YOUR asset 2. If the trust is irrevocable and you cannot access the principal under any circumstances until a future date, it generally isn't counted 3. If your grandparents created an irrevocable trust naming you as beneficiary but maintaining certain restrictions, it might not count The key question is: can the principal be accessed now for any reason (even with approval) or is it completely inaccessible until you reach 25?

I went through this exact same situation with my son's trust from his grandparents. The trust counted as his asset on the FAFSA because he was the beneficiary and the money could be accessed for educational expenses (even with trustee approval required). The only trusts that don't count are ones where the student truly cannot access the principal under any circumstances until a future date. For the 2025-2026 FAFSA, student assets are assessed at 20% in the SAI calculation. So that $67,000 would increase your SAI by about $13,400 if my understanding is correct.

omg i have the same problem. my grandma set up a trust for me when i was 12 and now im applying for fasa and nobody knows if i should list it. the trust says i cant touch it til im 30 except for school. it has like $35k in it. did anyone ever figure this out?

Trust assets are a nightmare with financial aid! I've spent HOURS on hold trying to get a straight answer from the Federal Student Aid office about my daughter's situation. After getting disconnected 3 times and waiting for 2+ hours, I finally tried using Claimyr (claimyr.com) to get through - they have this service that holds your place in line and calls you back when an agent is available. They have a video demo at https://youtu.be/TbC8dZQWYNQ showing how it works. It saved me SO much frustration and the FSA agent I spoke with confirmed that trusts with educational purpose provisions DO count as student assets even with trustee restrictions.

just wondering why would u even report the trust? they dont have access to trust records do they? not saying u should lie but just wondering how they would even know

When my son applied last year we were in a similar situation with a $42K trust from my parents. What worked for us was having the trustee (my brother) write a letter explaining that while the trust exists, the terms make the assets unavailable for general educational expenses because of specific restrictions. But your situation sounds different - if the trust specifically says it CAN be used for education, then I think it counts. Ours had very narrow permitted uses that didn't align with general college costs.

After reading the full details, I can confirm that your trust would likely count as your asset on the FAFSA. The key factor is that the money can be accessed now for educational expenses, even with trustee approval required. For the 2025-2026 FAFSA under the Simplification Act rules, the asset will be assessed at 20% in the SAI formula. However, there might be a possible workaround worth discussing with a financial aid professional: if the trust could be amended to restrict access until after completing undergraduate education (for graduate school only), it might not count for undergraduate FAFSA purposes. This would require consulting with the attorney who created the trust to determine if modification is possible without adverse tax consequences.

One important thing to remember - the FAFSA has a specific asset reporting date, which is the date you submit the form. So any legal changes to the trust would need to be completed before you submit your 2025-2026 FAFSA. If you're applying for aid starting Fall 2025, the FAFSA opens December 1, 2024. Ideally, you'd want any trust modifications completed well before then, considering legal processes can take time.

EVERYONE IS MISSING THE POINT HERE!!! The FAFSA Simplification Act changed asset reporting significantly!!! If the person is a DEPENDENT student (which sounds like OP is), there's a new asset protection allowance that's much higher than before. For the 2025-2026 FAFSA, if your parents' income is under $60,000, MANY ASSETS AREN'T EVEN COUNTED ANYMORE including a good chunk of student assets!!!! Check the FSA website for the current thresholds because this could make the whole trust issue IRRELEVANT!!!!

I'm dealing with a similar trust situation and wanted to share what I learned after consulting with both a financial aid advisor and an estate planning attorney. The key distinction that helped clarify things for me was understanding the difference between "available" vs "accessible" assets on the FAFSA. In your case, since the trust specifically allows withdrawals for "qualified educational expenses" (even with trustee approval), it's considered an available asset that must be reported. The fact that your mom has discretionary control doesn't change this - the FAFSA looks at whether the funds CAN be used for education, not whether they WILL be. However, I'd strongly recommend getting a written opinion from the attorney who created the trust about its FAFSA treatment before making any decisions. Some trusts have specific language that might affect reporting requirements, and you want to be absolutely certain. Also, definitely don't try to hide it - the potential consequences of misreporting far outweigh any short-term aid benefit. One thing that might help: if your family's income qualifies for simplified asset reporting under the new FAFSA rules, the impact might be less than you think. Worth checking those thresholds!

I'm a financial aid officer at a state university and want to clarify a few points that might help with your decision. Based on your description, the trust would likely need to be reported as your asset since it can be accessed for educational expenses, even with trustee approval required. However, there are a couple of important considerations that haven't been fully addressed: 1. **Timing matters**: If you're applying for the 2025-2026 academic year, you have until you submit your FAFSA to make any legal changes to the trust structure. But given the complexity, I'd recommend acting quickly if you're considering modifications. 2. **Professional Judgment**: Many financial aid offices can exercise "professional judgment" for unusual circumstances like restricted trusts. Even if the trust counts as an asset initially, you can appeal to your school's financial aid office with documentation about the trust's restrictions. We've adjusted aid packages in similar situations. 3. **Verification considerations**: During verification (which about 1/3 of FAFSA filers go through), we often request trust documents. Having clear documentation from your attorney about the trust's terms and FAFSA treatment will be crucial. My advice: Report it accurately on your FAFSA, but prepare a detailed explanation with supporting documentation for financial aid offices at schools where you're applying. Many of us understand these situations and have flexibility to help.