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www.ctcpas.org
So What Can Be Done?
College costs are way too high to not
have a specific plan mapped out as far
in advance as possible, ideally at the
time of divorce. A strategy is needed
that takes into account questions like:
Will this student likely be a candidate
for need-based aid, and can my
affairs be structured to increase that
likelihood?
Is my student bound for a high-
quality private college? If so, merit
aid is often not given, so knowledge
of the need-based aid system is
essential.
Can my closely held business play
a part in helping pay for my child's
education on a tax-favored basis?
How can tax incentives help?
Should we gift appreciated assets
to our child to sell and use proceeds
to pay for school? (Sometimes the
answer to this is a big yes!)
Debt is likely to play a part. Who
should borrow the money? Should
we borrow against the house or my
401(k), or just use federal programs?
There are literally dozens of tax, cash
flow, financial aid, and debt strategies
that can be combined to cobble
together a plan for financial survival
during the college years. Your divorcing
clients are in need of financial guidance
on this issue. Make it part of your
practice to not just deal with dividing
assets, but to help clients solve what is
sure to be a major roadblock to future
financial security.
This material is provided for educational purposes
only. It is not intended to constitute legal, tax,
investment or financial advice and may not be
used as such. Effort has been made to assure that
the material presented herein is accurate at the
time of publication. We recommend all individuals
consult with their lawyer or tax professional,
or their investment or financial advisor for
professional assurance that this material, and the
interpretation of it, is accurate and appropriate for
their unique situation.
John F. Pearson is a registered representative
of and offers securities and investment advisory
services through MSI Financial Services, Inc.
Member SIPC. Barnum Financial Group is not
a subsidiary or affiliate of MSI Financial Services,
Inc., or its affiliated companies. 6 Corporate
Drive Shelton, CT 06770 | 203-513-6000
L1016479882[exp0717][CT]
John F. Pearson, CPA, CASL is a financial advisor and financial services executive at Barnum
Financial Group in Shelton. You can reach him at jpearson1@barnumfg.com.
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