529 student or parent's on 529,

[JR4Skool]

1) Assets are in a 529 on Dad's name, with student as beneficiary.
2) If (divorced) Mom fills out FASFA, are these assets considered:
a) Stident's?
b) Mom's (as the parent competing FASFA)?
c) Dad's and since divorced Mom is completing FASFA they aren't reported? Even though they show student as beneficiary?
d( If said student was a beneficiary to Dad,in past year's taxes, can parents transfer his beneficiary to Mom NOW and will that mean when Mom does FASFA (using prior year's tax) can she file FASFA - does FASFA require post- tax beneficiary status?

[dcandmc]

Which parent did the student spend more time with in the 365 days immediately prior to FAFSA being filed? That parent will be the custodial parent for FAFSA purposes, and that parent's information will be reported on FAFSA.

If dad is the custodial parent, his 529 account would be reported on FAFSA as a parent asset.

If dad is the non-custodial parent, his assets would not be reported on FAFSA. HOWEVER -- any money used for the student's benefit from dad's 529 account would be reported on FAFSA as untaxed income to the student in the appropriate year, if dad is the non-custodial parent.

I can't figure out what you're asking in the last question. If by "beneficiary" you mean listed as a dependent on a parent's tax return, it makes no difference at all for FAFSA which parent claims the student as a tax dependent.

[JR4Skool]

OK thanks. So in this case Mom & Dad have shared custody but son spent more time with Mom. So Dad's 529 assets (this being submitted before Student's Freshman year) would not be accounted for on divorced Mom's FASFA, or anywhere. In future years, money from Dad's 529 paid twd son's college would be reported as Student untaxed income. Got it. thx.

I was told FASFA and colleges don't fret over who is custodial parent (although theoretically what you said - it should be parent who has greater custody- is true) but FASFA and colleges don't review divorce agreements. Thats what I was advised today.

Yes -By beneficiary I meant DEPENDENT and I verified today it makes no difference which parent claims student on tax as dependent- either can do FASFA. Lots of divorces have dependent switching between parent in opposing tax years so they don't factor that.
THANK YOU.

[dcandmc]

It's not "divorced Mom's FAFSA;" it's the student's FAFSA. Mom's financial information happens to be what's reported because she is the custodial parent.

The FAFSA rules are very clear regarding how to determine which parent is the custodial parent, when the parents aren't married and/or living together. A student completing FAFSA would violate those rules at their own peril if they were trying to game the system to get better aid. Colleges and the federal government do care about this. And you're right, divorce agreements don't matter. What matters is the actual situation as it has existed for the 365 days prior to filing FAFSA.