We all intend for the inheritance we leave behind to be for good, not to cause problems. When planning for the good of loved ones who are minors, you may be focused on protecting and preserving their inheritance from squandering, divorces, lawsuits and bankruptcies. While you are at it, however, be sure you do not jeopardize their eligibility for college financial assistance in the process.
While it's obvious, that too much inheritance all at once is a threat to moral developmen it is less apparent that same gift can threaten a college education by complicating financial aid. As parents of the college-bound understand to a dizzying degree, financial aid is a difficult calculus of have and have not. Unfortunately, the types of income a parent or student receive will have dramatic influences both on the availability of financial aid and the ease with which it is attained.
Enter the story of “Robin” as relayed in a recent Forbes article titled “An Inheritance That Could Foul Financial Aid.” The story of Robin and the potential difficulties of her children with financial aid is as much a story of family disagreement as it is of grumpy institutional curmudgeonry. Nevertheless, it is worth considering Robin’s story of family disagreement and the details of what sometimes prove ficticious or unavailable assets a FAFSA will sniff out.
What is even more important is to understand the adverse effect that different assets, inheritances and gifts could have on financial aid, taxation and/or financial viability for higher education. If your goal is to financially assist your loved ones through college, there are some very specific types of gifts to consider without jeopardizing financial aid in the process.
You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Forbes (November 18, 2013) “An Inheritance That Could Foul Financial Aid”