You are bound to get several answers as to grey areas of law and ethics.
If his trust proceeds are placed into a 529 of which he is not the owner nor is parent an owner then under current FAFSA logic then the 529 doesn't count and if the trust itself is empty then that may be moot as well.
Now how far the trustee can stretch his powers may depend on what the trust says AND who if anybody is there to object--clearly if the 18 year old come s out ahead its hard to say the trustee did not do well for the beneficiary. Now som emay say this endruns the social intent of aid rules---but the trustee is there to look out for best /safest investment options for the beneficairy--and a 529 may be a better / safer answer for teh kid involved.
The IEP is not relevant.
How to exit the 529 once past college is not rocket science--and any exit penalities pale if the aid issues worked
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Drew
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