Financial advice that advises cheating.

Over the weekend, 8/23-24/14, the WSJ published an article that tried to present a strategy for Grandparents providing 529 plans to their grandchildren and then hiding them from the colleges to which those children applied.

To take just two quotes: “Grandparents increasingly are opening such (529) accounts to help cover their grandchildren’s college costs. But their well-intentioned efforts could hurt students’ chances for getting financial aid…[and seven paragraphs later] The problem is most acute when students would otherwise qualify for financial aid based on their parents’ finances.”

Sheriff Simms is extremely concerned about how he passes on lessons to his grandson. I am extremely concerned about how we establish, support, and transmit solid values to our next generation. I am also a willing participant in supporting education costs for grandchildren.

Taken in total, the premise of the article offends me. In short, it is an article that encourages everybody to cheat. I know it’s tough and I know people scramble for every advantage they can cadge and I witness a daily assault on society’s belief in honest self-reliance, but sometimes I just cannot take it anymore. It is like recommending that I — of grandparent age — put all of my assets in a trust the beneficiary of which is my children so that I will qualify for Medicaid when they put me in the nursing home.

Parents often need help in financing the college education of their children (last I checked, the need amounted to 87% of all families). That they have received help is something to report honestly, not hide and obfuscate so that the money that is provided in help can be saved to spend on some purpose the WSJ writer did not explore.

Perhaps there is a more valuable place to spend your money than on helping your grandchildren get educated. Well, one such place is to provide for your old age. So, what you cannot give them, you cannot give them. But, let another few voices scream with me, what you can give them, do not lie about.

One thought on “Financial advice that advises cheating.

  1. An important topic, Edward. The conflict between paying your own way and taking Social Security – (which she’d some paid into but from which she was taking much more) – was a a great dilemma for my mother, a Rush Limbaugh conservative. She also watched as her neighbors (who argued loudly for the government staying out of their business even as they complained about any attempt to alter their God-given, rightful benefits) transferred all of their assets to their children so they could go on Medicaid in the nursing home. Mom wanted to leave as much to her children as she could but though sorely tempted, she could not make herself follow her neighbors’ example. We do get tremendously mixed signals on this topic.

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