529 plan on fafsa
I make much more money than my ex-husband and I am the account owner of my daughters 529 plan. My ex is able to be the custodial parent on the the college FAFSA which excludes my income for reporting on the FAFSA. Since he is reporting his income and not mine do we leave the value of the 529 plan off the FAFSA altogether? Thank you for any help you can give!
Terry Says
It is my understanding that the assets of the custodial parent (including those of his/her spouse if remarried) are what is required to be reported on the FAFSA. That would leave your account off the form, much as grandparent custodian 529 plans are not reported on FAFSA. Beware, though, since when money is taken out of a 529 plan that is not included in the FAFSA, the distribution is considered a student asset -- and weighs for more heavily against he family in the subsequent year. If you can wait to distribute the 529 in the student's senior year of college (assuming no graduate school plans), it won't impact financial aid decisions.
