FAFSA confusion: UTMA account from ex's parents - how badly will this affect my son's financial aid?

Yes, unfortunately you DO have to report the UTMA on both FAFSA and CSS Profile. The account is legally your son's asset, not your ex's parents' asset. Student assets are assessed at 20% for aid eligibility vs. parent assets at only 5-5.64%. So every $10,000 in that UTMA reduces aid eligibility by about $2,000. This is why UTMAs are terrible for financial aid! I learned this the hard way with my daughter.

Financial aid professional here. You absolutely must report the UTMA on both the FAFSA and CSS Profile as it's legally your son's asset, regardless of who controls it. On the 2025-2026 FAFSA, student assets are assessed at 20% toward the Student Aid Index (SAI). The CSS Profile has a similar assessment rate. However, your most immediate problem is getting information about this account. Since it's in your son's name with likely your ex as the custodian, you have legal options to obtain this information: 1. Your son (if 18+) can request account statements directly 2. You can formally request this information through your custody agreement 3. Your attorney can request financial disclosure through legal channels Timing matters here - don't delay getting this information.

Utmas are KILLERS for financial aid!!! My neighbor's kid lost almost $15k in grants because of a $30k UTMA the grandparents set up. They thought they were helping! The system is RIGGED to punish families trying to save. Student assets get assessed at 20% while parent assets are only around 5%. So unfair when the kid has no say in how these accounts are set up!!

Something nobody's mentioned yet: if your son will be starting college soon, you might consider spending down the UTMA on qualified educational expenses before filing FAFSA. This isn't avoiding reporting - you'd still report what's left - but using the funds for their intended purpose. Eligible expenses include a computer for school, SAT prep courses, college visits, application fees, etc. Just make sure everything is documented as educational. You'd need your ex's cooperation as custodian though.

If your trying to call Federal Student Aid to ask about this UTMA reporting requirement good luck getting through! I spent 3 days trying to reach someone before finding Claimyr (claimyr.com). It connects you directly to a FAFSA agent instead of waiting on hold forever. There's a video showing how it works: https://youtu.be/TbC8dZQWYNQ I used it to ask about a similar asset reporting question with my stepdaughter's accounts. The agent explained exactly what needed to be reported where, saved me hours of frustration.

One important point that hasn't been addressed: schools with their own institutional aid (especially private colleges) often have professional judgment procedures for unusual circumstances. Once you know the UTMA amount, you can request what's called a "special circumstances review" and explain that: 1. You were unaware of the account's existence 2. You have no control over the funds 3. Your overall financial situation with three children demonstrates high need While they won't ignore the UTMA entirely, many schools can adjust their institutional aid (not federal aid) to partially compensate. This won't help with your SAI for federal aid, but could help with private scholarships and grants.

Just to add something that might help - the 2025-2026 FAFSA (the new "simplified" version) has some changes to how assets are counted. I think there's now a higher asset protection allowance for parents, but student assets are still counted at that harsh 20% rate. If your family income is under $60,000 and you receive certain federal benefits, you might qualify for the auto-zero EFC pathway, but the UTMA could still mess that up. The CSS still looks at everything.

I work in a college financial aid office, and we see this UTMA situation more often than you'd think with divorced parents. One crucial thing: get the exact account type verified. Sometimes what people call a "UTMA" is actually a 529 account with the child as beneficiary but grandparent as owner. These are treated COMPLETELY differently for financial aid. Until 2023, grandparent-owned 529s didn't need to be reported on FAFSA at all, though the CSS Profile did ask about them. Rules have changed somewhat with the new FAFSA, but it's still much better than a true UTMA for aid purposes.

my parents got divorce when i was 12 and i had same problem with utma from grandma. it SUCKS but one thing nobody mention is that once your 18 or 21 (depends on state) that utma is YOURS legally not your dads or moms. in my state it was 18 so i just took the money out and used for school directly instead of aid. not ideal but better than nothing lol

As someone who went through a similar divorce situation with hidden assets, I feel for you. Here's what worked for me: First, if your son is turning 18 soon, have HIM contact the financial institution directly once he's of age - they legally have to provide account information to him as the beneficiary. Second, document EVERYTHING about when you discovered this account and your lack of knowledge/control over it. Third, don't panic about the 20% assessment rate until you know the actual balance - it might not be as devastating as you think. Finally, look into schools that meet 100% of demonstrated need and have generous aid policies for families under $50K income. Some schools like Harvard, Princeton, and others have sliding scales where families earning under certain thresholds pay nothing regardless of assets. The UTMA will hurt, but it won't necessarily destroy his college dreams if you're strategic about school selection and appeals processes.

I'm a financial aid counselor and want to echo what others have said about getting the exact account details first - this is crucial. Once your son turns 18, he can request statements directly from the financial institution. However, I'd also suggest reaching out to the college financial aid offices at his target schools BEFORE submitting applications if possible. Many schools have pre-application consultations where they can give you a realistic picture of how a UTMA might affect his aid package based on your income and family size. This could help you make more informed decisions about his school list. Also, don't overlook state schools - many have excellent aid programs for in-state students with your income level, and the lower sticker price means the UTMA impact might be less significant overall. The key is not to let this discovery derail his college plans, but to adjust your strategy accordingly.

I'm sorry you're dealing with this stressful situation - divorced parent financial aid issues are incredibly frustrating. One thing that might help is understanding that the FAFSA looks at assets as of the day you file, not throughout the entire year. So if there are legitimate educational expenses coming up (like college application fees, SAT/ACT prep, required school supplies, or even a laptop for college), and if you can get cooperation from whoever controls the UTMA, spending down some of those funds on qualified expenses before filing could reduce the reportable balance. Just make sure to keep detailed receipts and that everything is truly educational in nature. Also, since you mentioned three kids, remember that having multiple children does factor into the financial aid calculations - your Expected Family Contribution gets divided among enrolled college students. While the UTMA will definitely impact his aid, your overall family financial picture with modest income and multiple dependents should still demonstrate significant need to most schools.

As a parent who went through a similar custody situation with surprise financial accounts, I want to add one more perspective that might help. Don't forget that you can also appeal AFTER your son receives his initial financial aid packages. If the UTMA significantly reduces his aid at his preferred schools, you can submit a formal appeal with documentation about the circumstances - that you had no knowledge of or control over this account, your custody arrangement, and your actual financial situation supporting three children on $43k. Many schools will reconsider their aid packages when presented with compelling documentation of special circumstances. I successfully appealed at two schools for my daughter and got additional institutional grants that partially offset the impact of an unexpected asset. The appeals process takes time, but it's worth pursuing at schools where your son really wants to attend. Also consider having him apply to a mix of reach, match, and financial safety schools so you have options regardless of how the UTMA affects his aid eligibility.

I'm a newcomer here but wanted to share what I learned when facing a similar UTMA surprise during my daughter's college application process. The key is getting organized quickly - first, have your son request account information directly once he turns 18 (financial institutions must provide this to the account beneficiary). Second, start documenting everything NOW: when you discovered the account, communications with your ex about finances, your custody agreement showing financial responsibilities. This documentation will be crucial for appeals later. Third, consider expanding his school list to include more institutions known for generous need-based aid and lower sticker prices. Many state flagship universities have excellent honors programs and aid for families under $50k income. The UTMA will definitely impact his aid calculations, but with your income level and three dependents, he should still demonstrate significant financial need. Don't let this derail his college dreams - just adjust your strategy to work with the reality of the situation.

I'm new to this community but wanted to share some encouragement as someone who works in college admissions. While the UTMA discovery is definitely stressful, please don't lose hope! With your income level ($43k) and three dependents, your son will still demonstrate significant financial need at most institutions. The 20% student asset assessment rate on the UTMA is harsh, but many schools - especially those that meet full demonstrated need - have become much more sophisticated about evaluating complex family situations like yours. I'd particularly recommend looking into colleges with strong "no loan" policies for families under certain income thresholds, as these schools often have more flexibility in their aid calculations. Also, once you get the actual UTMA balance, you might find it's not as catastrophic as you're imagining. I've seen families in similar situations where the account ended up being smaller than expected, or where strategic appeals to financial aid offices resulted in additional institutional grants that largely offset the impact. The key is having multiple school options and being prepared to advocate for your family's unique circumstances.

I'm new to this community but wanted to add my perspective as someone who recently went through a very similar situation with my stepson. We discovered a UTMA account from his biological father's side that we knew nothing about right in the middle of the financial aid process. It was incredibly stressful, but here's what I learned that might help: First, the timing of when you file matters more than you might think. Since FAFSA looks at assets on the day you submit, if there are legitimate ways to spend down some of those funds on qualified educational expenses before filing (with cooperation from whoever controls it), that can help. Second, don't underestimate the power of the appeals process - we successfully got additional aid from three schools by thoroughly documenting our lack of knowledge and control over the account. Third, consider applying to some schools that are known for meeting 100% of need through grants rather than loans - these tend to be more understanding of complex family situations. Finally, remember that your $43k income with three kids still demonstrates real financial need, even with the UTMA factored in. This situation is frustrating but not hopeless - you just need to be strategic and persistent in advocating for your family's circumstances.

I'm new to this community but wanted to share some hope from someone who just went through this exact nightmare! My ex's mother set up a UTMA for my daughter without telling me, and I only found out during senior year when we were already deep into the college application process. Here's what saved us: First, don't panic until you know the actual amount - mine turned out to be much smaller than I feared. Second, the appeals process really does work if you document everything properly. I created a timeline showing when I discovered the account, gathered emails proving I had no knowledge of it, and included our divorce decree showing my financial responsibilities. Three out of four schools we appealed to gave additional institutional aid. Third, look specifically at schools with generous aid for families under $50k - some private colleges actually ended up being MORE affordable than our state schools once they factored in our circumstances. The UTMA definitely complicated things and we had to adjust our strategy, but my daughter is now at her dream school with a manageable aid package. The key is having multiple options, being prepared to advocate fiercely, and remembering that financial aid offices deal with complex divorced family situations all the time. You've got this!

I'm new to this community and wanted to share some perspective as someone who works with families navigating complex financial aid situations. While discovering this UTMA is definitely stressful, please remember that your overall financial profile - $43k income supporting three children - still paints a clear picture of genuine need that schools will recognize. The 20% student asset assessment is harsh, but it's applied to the UTMA balance, not your entire financial situation. A few strategic suggestions: First, once your son turns 18, have him directly contact the financial institution to get complete account details - they're legally required to provide this information to the beneficiary. Second, start researching schools that specifically advertise generous aid for families in your income bracket - many have sliding scales where families under $50k pay significantly less regardless of assets. Third, don't overlook the power of applying to a diverse range of schools, including some that might not be on your current list but are known for excellent financial aid. Finally, document everything about this situation now - when you discovered it, your lack of control over it, your custody arrangement - because this documentation will be crucial if you need to appeal aid decisions later. This situation complicates your strategy but doesn't eliminate your son's college opportunities.