Who should I consult about moving my daughter's savings to a 529 before FAFSA? Tax advisor or financial planner?

i moved some money around for my son last year. dont bother with a financial advisor they just want to sell you stuff. CPA is your best bet they know all the FAFSA rules

You definitely want to consult a professional who specializes in college financial planning, not just any financial advisor or CPA. The rules around asset transfers and FAFSA reporting are specific and constantly changing with the new FAFSA simplification. A few important points: 1. Student assets are assessed at 20% while parent assets are assessed at a maximum of 5.64% in the SAI calculation 2. Timing matters - assets are reported based on the date you submit the FAFSA, not your daughter's age 3. Moving assets to a 529 under your name could be beneficial, but there are important considerations: - The money becomes your asset (your daughter loses control) - There may be gift tax reporting requirements (though likely no actual tax due) - Some states have look-back periods for asset transfers I'd recommend finding a Certified College Financial Planner (CCFP) or a financial advisor who specializes in college planning rather than a general CPA.

Be VERY careful about this!! When I tried moving my son's money around before FAFSA, we almost got flagged for suspicious activity. The financial aid officer at his school asked for documentation of ALL account transfers from the previous 24 months. They can deny aid if they think you're just shuffling assets to game the system!!! Not worth the risk in my opinion.

I went through exactly this situation last year with my daughter's college applications. Here's what I learned: 1. You need a professional who understands both tax implications AND financial aid rules - most advisors only know one side 2. For FAFSA purposes, moving assets to a parent-owned 529 can be beneficial, but timing is critical. It needs to be done before you submit the FAFSA application, not necessarily before she turns 18 3. The new FAFSA has changed some rules around asset reporting I found the most helpful professional was a fee-only financial planner who specialized in college planning. They don't sell products, so their advice isn't biased toward certain investments. Look for credentials like CCFC (Certified College Financial Consultant) or someone who specifically advertises college planning expertise. Be wary of "free college planning workshops" as they're often selling expensive services.

My cousin works at university financial aid office and she says they see people transfering assets all the time. It's totally legal as long as you do it before filing FAFSA. The money is still going to education anyway! Just don't lie on the FAFSA forms about where the money came from originally.

When I needed help with FAFSA and my kids' college funds, I spent HOURS trying to get through to someone at Federal Student Aid who could actually answer my specific questions about asset reporting. Kept getting disconnected or waiting for 2+ hours. Finally tried Claimyr (claimyr.com) after another parent recommended it, and they got me connected to a FSA agent in about 10 minutes. The agent walked me through exactly how different assets are counted and what transfers might raise red flags. They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ That said, for your specific situation with that much money involved, I'd also recommend consulting a fee-only financial planner who specializes in college planning. The free FSA advice is helpful but won't cover all the tax implications.

forgot to say - do it ASAP becuz some ppl say theres a "lookback period" where they can see if u moved money right b4 applying. better safe than sorry

hi! just wanted to say my parents did this exact thing with my college fund when i was 17. they put like $30k into a 529 and it definitely helped with my financial aid packages. but now that i'm in my 3rd year some of that money is still sitting there while i have other student loans that i can't pay off with the 529 money without tax penalties. so maybe don't convert ALL her savings?

One more important point I forgot to mention - when you transfer the money to a 529, make sure you understand your state's rules. Some states offer tax deductions for 529 contributions which could give you an additional benefit. Also, some 529 plans perform better than others investment-wise. A college financial planner can help you select the right 529 plan based on your state and situation.

As someone who works in financial planning, I'd strongly recommend finding a fee-only financial planner who specializes in college planning AND has experience with tax implications. Don't go with someone who only knows one side of this equation. A few key considerations for your situation: - With $42K in student assets, you're looking at a 20% assessment rate vs 5.64% max for parent assets - that's potentially $6K+ difference in your SAI - The transfer needs to happen before FAFSA submission, not necessarily before she turns 18 - Gift tax reporting may be required but likely no actual tax owed (annual exclusion is $18K for 2024, but you can file Form 709 for amounts over that) - Consider keeping some funds accessible outside the 529 for flexibility, as another poster mentioned Look for someone with CCFC (Certified College Financial Consultant) credentials or similar college planning specialization. The consultation fee (usually $200-500) will likely save you thousands in the long run. I'd avoid anyone pushing specific investment products or offering "free" seminars. Also remember that private schools using CSS Profile may have different asset protection rules than FAFSA-only schools.

I'm in a very similar situation with my son who has about $38K saved up from various sources. After reading through all these responses, I'm definitely leaning toward finding a fee-only financial planner with college planning expertise rather than just our regular CPA. One thing I'm curious about - for those who have gone through this process, how far in advance did you start planning? My son is a junior in high school now, so I'm wondering if I should be moving on this soon or if I have more time to research and find the right professional. Also, @Carmen Lopez, your breakdown of the potential SAI difference was really eye-opening. When you mention keeping some funds accessible outside the 529 for flexibility, what's a good rule of thumb for how much to convert vs. keep liquid? I'm thinking maybe convert 75% to the 529 and keep 25% in regular savings for unexpected expenses during college?

Thank you all for this incredibly detailed discussion! As someone new to navigating FAFSA and college planning, this thread has been so educational. I'm particularly grateful for the specific credential recommendations (CCFC, fee-only planners) and the real numbers breakdown showing the potential $6K+ impact on SAI. The warnings about lookback periods and documentation requirements are also eye-opening - I definitely want to avoid any red flags during the financial aid process. One quick follow-up question: For those who worked with college financial planning specialists, did they typically handle both the asset transfer logistics AND help you understand which schools might be most generous with aid based on your financial profile? I'm wondering if I need one professional for the FAFSA strategy and another for school selection guidance, or if the right specialist can help with both aspects. This community is amazing - thank you for sharing your real experiences and saving the rest of us from costly mistakes!