Does a court-sealed Trust fund from deceased parent count on FAFSA if student can't access until 25?

exact same situtation for my son!! his grandma left him a trust but he cant touch till 30!!! fafsa still counted it as his asset and screwed his aid all up

This is actually a really important distinction in FAFSA reporting rules. According to the Federal Student Aid guidelines, if the trust is legally restricted and your daughter has absolutely no access to the principal or income until a future date (in this case, age 25), then it should NOT be reported as a student asset on the FAFSA. The key factors are: 1. The trust is court-ordered and legally binding 2. She has zero access to both principal and income until age 25 3. A third-party trustee independently controls the funds However, if the trust generates any income that's distributed to your daughter or reported on her tax return, that income would need to be reported. Make sure you have documentation from the trustee showing the legal restrictions in case the financial aid office requests verification.

The prior comment is correct. I work with families on FAFSA appeals and this comes up more than you'd think. When a trust is legally restricted with NO possible access before a specific age, it's not considered an available asset for FAFSA purposes. But here's what you need to do: 1. Get an official letter from the trustee stating the legal terms 2. Have the letter specify there is NO distribution of income or principal allowed 3. When completing the FAFSA, don't include the trust as an asset 4. Be prepared for verification - the financial aid office may request documentation 5. If they initially count it incorrectly, you can appeal with your documentation This is one of those situations where people get different answers depending on who they talk to, but the official FSA guidelines are clear on this point.

Ugh the FAFSA is such a nightmare!!! I went through something similar with my daughter's inheritance from her grandfather. Despite having ALL the paperwork showing she couldn't touch it until 30, they STILL counted it and she got practically no aid!!! The whole system is designed to punish families who have ANY assets even if you can't use them!!! We ended up having to take out massive Parent PLUS loans and now we're drowning in debt. The financial aid system is BROKEN!!

I tried calling FSA about a similar trust situation for my son last year and spent LITERALLY 3 hours on hold before getting disconnected. Finally I used this service called Claimyr that got me through to an actual FSA agent in under 20 minutes. The agent confirmed that if there's literally no way to access the trust before a certain age, it's not a reportable asset. Totally worth checking out their site claimyr.com if you need to talk to someone official about this. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ

Important technical point: The updated 2024-2025 FAFSA (and the upcoming 2025-2026 form) specifically addresses trusts in the asset section. If a student (or parent) has a trust but CANNOT access the principal or income, it is not considered an available asset. This is covered in the FSA Handbook section on Student Assets. The confusion often happens because some financial aid offices misinterpret the rules. Get a letter from your trustee that specifically states: 1. The trust is court-ordered 2. Neither principal nor income can be accessed before age 25 3. The terms cannot be modified If the financial aid office still counts it, request a Professional Judgment review and cite the FSA Handbook guidance on inaccessible assets. Different schools handle these situations differently, but the federal guidance is clear.

Not to go off topic but does anyone know if this applies to 529 plans too? My ex set one up for our kid but I can't touch it and don't know if I'm supposed to include it on FAFSA?

Thank you everyone for all this helpful information! I've contacted the trustee to get a formal letter stating the terms and restrictions. I'll make sure it clearly states she has zero access until 25 and that no distributions of any kind are permitted. I'm feeling much better about completing the FAFSA now, though I'll be prepared for possible verification. If they do incorrectly count it initially, I'll follow the advice about requesting a Professional Judgment review with all documentation. Thanks again for the guidance!

Just wanted to add my experience as someone who went through this exact situation two years ago. My daughter had a similar trust from her deceased father that she couldn't access until 26. Initially, our school's financial aid office counted it and drastically reduced her aid package. However, after submitting the trustee documentation and requesting a Professional Judgment review, they reversed their decision completely. The key was having that official letter from the trustee that explicitly stated "no access to principal OR income" - apparently some trusts allow income distributions even if principal is restricted, so they need to see both are off-limits. Don't get discouraged if you hit roadblocks initially - the appeal process really does work when you have proper documentation!