The federal methodology to determine the total household net worth is and can be very complicated for the family to figure out and plan for. There are certain investments and liabilities which are not considered an asset to the Government funds the universities concerned, and there are places you can have extra money to be fair game to the financial controller. Below, you will find a general explanation of the basic guidelines that you should try to follow in order to keep your assets FAFSA friendly when applying need-based aid through from the government.
It may be easier to start by listing assets and savings to FAFSA Board will not consider as imputed income for a family or a student. These are annuities, cash value life insurance, equity value of the primary residence home, family prayer, personal property and things like household furniture, collections, clothing and the like, and retirement accounts. 401K, your IRA, September, Keogh, or other type of retirement savings are safe from being counted as assets
Savings and assets belonging to both family income and student are as follows .: trusts, limited stocks, bonds, tax-exempt bonds, money market accounts, mutual funds, US government bonds, custody accounts, certificates of deposit, checking and savings accounts, investment properties, vacation homes, farm and property, and business property and equipment. There are ways you can against the assessed value of real assets, such as mortgage amount holiday home or have a margin account loans through brokers.
where trust funds and custody accounts are concerned, the government will not evaluate the entire amount as income unless the account is the only possession of either the student or parent. In cases where a trust or custodial account is in place for many people, a financial advisor may have to participate in order to balance the amount of moneys belonging to the student and / or parents. When all the disposable assets have been calculated by FAFSA administrator, the next set of rules governing the financial food aid will come into play. The federal law allows for asset protection allowance to help ensure the future stability of the family income.
This depends not only total assessed income of the family, but with the age of the parent (s) both at the time of application and at the time scheduled discharge. The older parents are, the greater the protection of property allowance is calculated to the end result. Whatever way you choose to locate assets in order to achieve the best financial results for your situation, be sure that all changes and arrangements are fully implemented for T least 12 months before filling out the FAFSA application. This is especially true of separated or divorced parents, where the income of the parent who has been the subject of last year will be the determining factor.