Elder Care and College Planing, a Sticky Situation

Many individuals find themselves in the sticky situation where elder care planning for a parent and applying for financial aid has placed financial strain upon them. Parents want to do right by both their aging parent and child, but given the collision of events they may have to make a hard choice. 

To set the scene – the prospect and their aging parent visits an elder law attorney who recommends their aging parent fund an asset protection trust to help the senior qualify for various types of assistance. Let’s assume, for the sake of the example, this strategy checks all the boxes on being sound and reasonable given their finances and care preference. When creating this type of trust, the grantor (the aging parent) can not also be the trustee. Legally, the senior is giving their money away to trust in order to make the case that it’s no longer their asset. And just to reiterate, if it’s no longer their asset, then it can’t be considered a disqualifying resource when they apply for assistance. So since the parent can’t control the trust, who gets nominated? Typically their most savvy or only child (aka – my prospect).  Meanwhile, they also have a child with college aspirations. Yes, some money has been saved in a 529, but not enough to cover everything. To bridge the gap the family decides to apply for financial aid. While filing out the form they get to the section about assets.

Our team here at Shore Financial Planning (SFP) always has our clients best interest in mind. As fiduciaries, we’ve taken an oath to prioritize your financial well-being above all else even during hard times. We’ll treat you with the honesty and integrity you’d expect from someone with whom you are entrusting your future.