For nearly 30 years, I have clients and others give my name to someone that was going through a life event such as the loss of a spouse, someone retiring, going through a divorce (or coming out the other side), or just someone that brought up a financial concern.
Many times, I was able to offer guidance and keep one from making irreversible mistakes. Sometimes, it was too late.
It's been a busy couple of months. They say things come in threes and this is a good example.
- I got a call from a woman whose husband had to enter a nursing home and told me she knew that if her husband owned anything, he wouldn't be eligible for MassHealth (which can cover nursing home care expenses). She went on to tell me that she wanted to be proactive so she retitled their primary residence into their three adult children's names.
This is a perfect example of…One, doing something under a stressful situation and Two, not seeking proper advice first.
Here is where it can get tricky. She did tell me her brother-in-law told her "You have to get "Carl's" name off the house!" Was her brother-in-law an elder law attorney? Perhaps a Certified Financial Planner® practitioner that has experience in this area? Maybe they work for the department of elder affairs? Um, no. The brother-in-law is retired English teacher.
Did he mean well? There is no doubt in my mind that he did.
Unfortunately, he didn't know the rules surrounding MassHealth qualifications and the lookback period rules.
- Next was a recent widow. Her husband passed away a couple of months prior and she had told me she listed the house for sale. I asked what her plans were when the house sold. She had decided to move to Vermont to be close to her son.
Now, this may be a mistake or it might not. BUT, in my experience, it is always best to NOT make major financial decisions like this for at least six months (to a year preferably)
- Last, but not least was a couple whose son was going to be entering college as a freshman in September of 2020. They were told (this time from someone who claimed to do "college planning") to take out a home equity line of credit on their house and then use that money to buy an annuity. This way, the schools would think they had less money.
Well, over the years, Lyman and I have heard various takes on this strategy. However, in our experience one of the key factors in whether someone receives more financial aid, is predicated on their income not their assets. Especially, not their equity in their home. Private schools can look at home equity when determining aid; however, there are a few factors to consider.
For example, in this family's case, their household income was close to 300k a year. They would not be eligible for any need based financial aid regardless of what they had for home equity.
In making any major financial decision it is imperative to get the right advice from the right person.
As I've said in the past, many can give financial advice (even without being qualified). Would you ask your dentist for legal advice? Your lawyer for plumbing advice? Your family and friends truly care about you and may think they are providing sound advice when in fact, the advice given could put you in a much worse position.
In matters of finance, we are here to guide you. If we don't have the answer, we surely know the best source to obtain it for you.
Oh, and if you know anyone going through any type of financial situation, do a good deed and give them our number.
I'm here to help.
All the best.
Rick Fingerman, CFP®
Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. Financial Planning Solutions, LLC (FPS) provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.