Obviously if the $100,000 shows up it must be reported and it is a killer to any financial aid, like over 100% if left in place.
I do not recall how the questions are worded---however if she completes the forms prior to being legally entitled to the funds then the correct entry may be zero? However if the funds are already vested in her name--then the $100,000 shows up and needs to be reported.
However if she were to gift the sum to Mom prior to completion of the FAFSA it would disappear. I'd be uncomfortable with a $100,000 gift to Mom for other tax reasons however. I won't address morality. But it would count zero not 6% since home equity doesn't count!
But if Mom opens up a 529 she owns for kid and kid puts all $100,000 it cuts impact to 6%, then if Mom changes beneficiary to other child it may drop to 0% (I do not recall if other folks 529's come into play.) But all this w/o any gift tax issues.
Note , if Moms tax returns are short forms then she doesn't even report her assets on FAFSA, last I read rules, then her 529 would not show up at all--and she gets some asset protection if it did so it probably would not hit 6%
Hey, if you think the rules are odd--I didn't write them!