[WSBAPT] Trusts for College Financial Aide purposes?

[Laura Latta]

Thank you for your thoughts, Nick and I appreciate you sharing the helpful
infographic. It has always been my understanding that trusts would be
included on a FAFSA. However, if someone has found some way to structure a
trust to exclude it from the assets considered clients may ask about it
more and it would be good to know if this is a cottage industry that is
cropping up. Interested to know if other folks are hearing about this.
Warmly,
Laura

On Tue, Dec 9, 2025 at 7:48 PM Nick Pleasants <npleasants at ohswlaw.com>
wrote:

> Laura,
> What an interesting question! I think the answer will depend on FAFSA
> procedures. Just like the POMS has includable and excludable resources for
> Medicaid, I believe FAFSA has very specific regulations on that.
> StudentAid.gov <https://studentaid.gov/articles/fafsa-for-parents/> states
> that Trust Funds are "investments" that must be disclosed on the FAFSA.
> However, apparently Retirement Accounts and Life Insurance are not
> "investments"?! That seems like a loophole you can drive a semi truck
> through. Perhaps I should invest in a single premium whole life policy when
> my kids apply to college.
> Best,
> Nick
>
> *Nicholas Pleasants | Shareholder*
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> *From:* wsbapt-bounces at lists.wsbarppt.com <
> wsbapt-bounces at lists.wsbarppt.com> on behalf of Laura Latta <
> laura at lauralatta.com>
> *Sent:* Tuesday, December 9, 2025 3:27 PM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
> *Subject:* [WSBAPT] Trusts for College Financial Aide purposes?
>
> Hello Listmates & Happy Holidays!
> I was recently asked whether trusts can be used to assist families (who
> might not otherwise qualify) receive federal college financial aid?
> (Similar to a medicaid trust, but for financial aid?) I don't do this work
> (nor am I considering doing it), but I would be curious to know if this is
> something that is out there and if so, is it legitimate?
> Warmly,
> Laura
>
>
> *Laura Latta Law Office of Laura Latta PLLC*
>
> she/her
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