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Lola
Our daughter is still in middle school, but we were thinking in creating her a bank account and make some investments on her name with her savings (not a lot).
When applying to college, we imagine she’ll not have financial aid due to our high incomes, investments, and assets, but could her having money on her name affect any possible Merit that she may try to get?
(She’s a very strong student).
We are not originally from the US, so this is all new for us.
Thanks!
VictorYes as it plays to their net worth but you will still be able to take a loan.
I’m a firm beleiver to avoid 529 plans and focus on making your child a multi millionaire
TerriI have friends who sent their son to an ivy league university to study law and are high income earners, 7-figure annual income range.
They have 529 plans for him and their daughter through their advisor and they also set up their own family bank concept through a cash value life insurance.
This would help them control their own money at a tax-free environment.
We do the same for our kids.
We all are from different countries as well.
ScottThe FAFSA calculation assigns a higher percentage to property owned by the child/in their name than property of the parents.
But, if you know they won’t receive financial aid, the kiddie tax can be quite beneficial versus having it in your name.
But having a trust, such as an UGMA or UTMA, for the child must be released to the child at a younger age than what you may prefer.
KathleenWon’t affect merit aid. It would affect need-based aid but you’re not concerned about that, so you’re fine.
VictorThink about it. Imagine your child being 50 and being worth millions. The stress that removes from life and flexibility they will have.
It’s life changing!
HanaCharles Schwab does minor accounts. If it’s not going to be a lot of money I wouldn’t worry about impact on financial aid, it just depends on how much you are talking about.
When she starts working, however, start putting her income into a Roth IRA and you can then pull out of the brokerage for purchases.
Ira accounts don’t count towards financial aid at all.
ToniFidelity has a teen youth account for investing. I use it for my 13yr old.
This may be a downside for you but Fidelity gives him full control over it & I can only monitor what he does.
HunterNo, assets have no affect on merit awards.
Financial aid as, people think about it from the past, is gone.A kid can get up to $5k per year with a government loan in their name, merit is from the school, Pell if you are poor (truly very low income).
After that it’s all parent loans, savings and earnings(cash).
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