Correct, the assets are being held in a bank account.
The intention is that my sons will receive the money after they graduate, so it will not be used for college expenses and should not generate student income during the FAFSA years.
I'm not trying to hide my assets; I do not consider these to be my assets. My mother did not give these gifts to my niece and nephew until after they graduated and is only passing them on now since she is concerned about her ability to see my children graduate (she is 83). Her intention is that my children will not receive this gift until after they complete college.
I wanted to ask you about the preferential treatment of the 529 with respect to financial aid. I see this mentioned repeatedly, but I thought that 529 assets are assessed at the same 5.64% rate as the rest of the parents' non-529 assets.
Is that not the case?
Since this money is expected to remain intact until after graduation (my mother has specified "several years" after), I don't think that a 529 is the solution.
It is not a huge amount ($10K each, $20K total), but it could add ~$1K per year to my EFC for the next six years and will not be reduced during that period for college expenses.