Speaker 1: 0:00

Welcome everybody. I hope you have had a fantastic holiday season. I have enjoyed myself. I did a bit of traveling, saw family and friends, had great food, all the stuff.

Speaker 1: 0:14

I'm getting ready to start back up the new year with a new long series focused on understanding your child's emotional brain, how it develops, how that relates to attachment and how that impacts co-parenting. This is going to be a multi-week series where we start actually from the child in gestation all the way through, talking about how the child's right brain, their emotional brain, develops, talk about the theories of attachment, attachment issues that come up in co-parenting, how to deal with them. I don't know for sure, but I anticipate this will be an eight to 10 week series laying the foundation, and then I hope to have several interviews with professionals other than myself to talk about these ideas and to get their insights, so this very well could wind up being something like a two to three month series. Today, though, is the last of our holiday replay season. Today is going to be part two of College Financial Planning for Co-Parents, with Brad Baldrige, a college funding consultant, who was just extraordinarily resourceful. He knew so much about this topic and I learned a great deal talking with him back when we first had our conversation. I hope you're learning a lot about how to plan for college as co-parents. I think it's really helpful information that is maybe far out under time horizon, but it's never too late to start thinking about it, and never too early.

Speaker 1: 1:51

So, thank you, please enjoy this information from Brad Baldrige, and I will see you next week as we start our series on understanding your child's unconscious mind, their emotional development, attachment issues. Thanks See you then. All right, welcome everybody. This is part two of our conversation with Brad Baldrige, who is a college financial specialist who blew our minds in the first episode about all the things that we didn't know about college financial planning various ages, what age your child is, and then also some special circumstances, for example, student athlete or just a top notch Linda caliber student. What to do with that just gem? So, brad, thank you for joining us for this week as well. And what do we do with a situation where the parents are getting divorced or separated? Their kids are college age or already in college and they've not done any planning because they spent the last five years fighting about all the things that led to their divorce.

Speaker 2: 2:51

They're probably spending all the money they could have spent on the child's education. Just saying.

Speaker 3: 2:55

Well, right, exactly. Well then that boils back to what we talked about last episode. If you can get along in this situation, that would be great. If you can get along in this situation, that would be great. If you can't, well then you're just going to have to work it out.

Speaker 3: 3:08

So when I'm working with families sometimes I am working with the parent that kind of gets stuck with college. In other words, we're in the middle of a divorce, I'm going to have to pick up the pieces and pay for college now because they're in the middle of college, and that's just the it is, because if I don't do it, I don't think it'll happen, I think they'll have to drop out. So sometimes there's that kind of very unfortunate leverage going on and that's not ideal, um, but it's reality for some where it's like you're just gonna have to figure it out whether they cooperate or not. Other times you can be, you know, be cooperating. But when we get into the technicalities of it, all right.

Speaker 3: 3:48

So, as an example, we talked last time that financial aid looks at a tax return from prior, prior year. So it looks back, perhaps back when you were married and you have a joint tax return. So that's one challenge that I see a lot of families dealing with is you can now kind of pull the tax return apart and reconstitute it as if you were single, and it changes how financial aid works when you fill out the forms then. So, but that's a process that you need to really understand. There may and I'm trying to even think if we have any new rules with the new FAFSA. I'm not aware of them at this point, but they may be coming. I don't know. That's. The other challenge is right now the FAFSA system is changing, so we don't have a lot of precedent. We had a lot of history with the old system. Now that they're changing the rules, we don't have a lot of history about well, what do we do about this weird situation? But you know that just doesn't exist at this point, so we're learning more.

Speaker 3: 4:51

So I want to caveat that with you know, things could change next week if they release some new information I'm not aware of, but I think that's one of the challenges is, things are changing midstream. For some families that may mean you're going to qualify for more aid, which might then mean but then you got to figure out how to apply for it and do it well. Sometimes you're also dealing with how the colleges will view it, where again with smaller families or other situations. So I think there's some opportunities there that again, and there's a lot of provisions based on the appeal process right. So when you're working with colleges, you fill out the application process and then you can appeal the award and perhaps they'll reconsider it. And you know, usually you're appealing it because something happened, you know, like Hurricane Katrina, when it wiped out lots of people's livelihoods and businesses. There was kind of a blanket permission that anybody affected by Hurricane Katrina had an appeal and probably could easily get get that through, because it was just so devastating to a lot of those families.

Speaker 3: 6:11

That and Hurricane Sandy and other natural disasters like that, but it doesn't have to be caused by a natural disaster. You know, there could be a death in the family, there could be a separation, there could be a divorce. That would be an example of a reason to have an appeal. So you can go back to the college and say well, you know, we're a little confused and a lot of colleges are set up to help with those types of things. In the end they may or may not be able to help, but it's always worth a shot as well.

Speaker 1: 6:42

I guess the colleges want students to have access to as much money as possible, so is that why they're set up to help?

Speaker 3: 6:50

Well, yes, I mean it's right again, the way the financial aid system works is the federal government puts these programs together and then they push it onto the colleges to administer it and figure out all the rules and do all the paperwork and all that kind of stuff. So it's kind of in the college's purview then to determine. You know, in these situations we can override what's on the form because it's no longer relevant. Yes, two years ago your income was was much, much better than it is now. So we're going to use a more current data and based on current data, then maybe you get more aid. And again, the aid could come from the federal government, could come from state or it could come from the colleges themselves.

Speaker 3: 7:33

Another important thing is a lot of colleges don't want their students left hanging, especially if it was out of the students' control. They may have a little bit of mercy and say, well, if we can just come up with a couple thousand more, then we can get the student graduated. Sometimes that's in the college's best interest. You know, just from a purely selfish, we want more graduates to actually graduate from our institution because we want to keep our statistics strong. So if we have to throw some money at the student to make it happen. We will. That's really interesting.

Speaker 2: 8:06

I didn't know that ever happened. That's pretty cool.

Speaker 1: 8:10

But in a sense, too, also to hear the word appeal, and as an attorney and if you're involved in the legal system, typically you're thinking of an appeal. As the facts are set, you can't go back and change the facts. You can now make some arguments about the facts that previously existed, but I hear you saying that in the FAFSA world a change in circumstance is something that can be the basis of an appeal. And so if your child's already in college and maybe you applied and you didn't get it before because you had a joint tax return, that change in circumstance of the divorce means hey, go back and maybe look at an appeal because maybe that change in circumstance can help you out.

Speaker 3: 8:46

Right, absolutely. And, like I said, the right answer sometimes is you can't rely on the automatic system that pulls in the tax return. That isn't applicable anymore. You need to manually do it and most families aren't equipped to do that and probably don't even know that they should have done that. So you know, again, in a divorce situation, I think that you start with college and ask for their help or find you know an expert like myself or wherever, but get some help. It's not something that most people are going to be able to do on their own and, again, many people are capable of doing it, but you have to spend the time to understand the whole system and it gets pretty complicated. So either you spend a lot of time understanding and planning or you outsource it to the college or to an advisor or something, dr. Well, I can tell you.

Speaker 1: 9:38

You know, I just recently went through the FAFSA form, like I think we did it two months ago for my kid, and from our perspective it was stressful. Not because we thought we were going to get any aid, because we know we're not, but in Tulsa County there's a program called Tulsa Achieves where a child can go for two free years of education at a local community college and completely paid for it. But you have to fill out FAFSA in order to get the Tulsa Chiefs money.

Speaker 2: 10:06

I didn't realize, yeah.

Speaker 1: 10:08

Yeah. So even and the reason I bring that up is that even a fairly sophisticated person like myself don't laugh Linda trying to fill out the FAFSA, even when I knew I didn't have a lot of money on the line, it was just for this local Tulsa Chiefs, it was still complicated, it was stressful, it was annoying. It was kind of like that person where you see their number come up on your phone You're like oh, I'm not picking that up. That's how I felt about filling out the FAFSA. Like when I sat down at the computer I had this sense of dread, like I cannot believe I have to go do this again right.

Speaker 3: 10:43

So exactly, and if the divorce is happening while there's kids in college, I mean, it's just a busy time and I think a lot of times the keeping up with the paperwork and dealing with the college stuff falls by the wayside just from a matter of we don't have the emotional energy to do all that needs to get done and so we just let stuff drop. And I I've seen that, you know, and divorce isn't the only reason that that happens. I've had situations, you know, where there's a, a death in the family and all of a sudden, it's really ill.

Speaker 3: 11:14

Somebody's really ill. Exactly All of a sudden you know that stuff didn't seem important and it probably wasn't important. But now you're falling behind. And when it does become important, now all of a sudden you got to get caught up and you know it could cost you.

Speaker 2: 11:31

Unfortunately, the young adult child and the parent that they thought was going to or that had started out paying the majority of the college tuition and so forth, and something happens like you're just describing and that parent is no longer picking up that ball and it can really cause a rift in the relationship.

Speaker 1: 12:07

Yeah, or you get to the areas of distrust and I've seen multiple occasions where, as a parenting coordinator, I've had parents come to me and one parent will say that other parent won't give me their tax return, that I need to help complete the FAFSA, and the parent who isn't given it is saying well, they don't really need it, they just wanted to figure out how much money they can come after me for. So all of those entanglements occur in the midst of the litigation process.

Speaker 3: 12:37

Right.

Speaker 1: 12:38

So, brad, let's say that you have a kid who hasn't started, hasn't graduated high school, yet you have a kid who hasn't started, hasn't graduated high school yet. Which next age group should we consider?

Speaker 3: 12:49

Right. So let's talk about the late stage college planning situation, and that would be high school sophomore through senior, when all the heavy lifting happens as far as visits and test planning and applications and all that stuff. So another great example of we were distracted by, you know, setting up two households when we had a high school sophomore, college seemed a long ways away, so we didn't even think about it until senior year and now all of a sudden, oh my God, I guess we should have not done that because we're way behind now. That's, I think, a reality for a lot of families.

Speaker 2: 13:27

That are you know kids are in high school.

Speaker 3: 13:32

And you know so, ideally, if you can avoid that, that would be great. But again, now we're starting to talk about, well, we can plan. You know, with kids already in college, you know, maybe the impact only happens on a year or two of college, whereas if you've got a bunch of kids in high school and younger, you know it's, it's going to be real, real quick. So you're already visiting colleges or thinking about it or whatever it is, and then you're saying, well, who's going to pay for all this? And that's when the reality starts sinking in of well, when we were together, we said things like any college, any price. We can make it happen. But now we have to renege on that. Maybe Not a lot of parents have ever said any college, any price.

Speaker 2: 14:21

This is not in the last five or 10 years. It's kind of crazy expensive now, but when I first started, the grandparents are paying right, right exactly when I first started this college was a little more reasonable and a few parents would say we don't care what it costs, we'll just pay for it.

Speaker 3: 14:38

If that's the, if that school's the best fit, we'll pay for it we'll figure it out.

Speaker 1: 14:44

Yeah, that explosion has been crazy in prices. I mean I was talking to somebody the other day my law school was seven thousand dollars a semester.

Speaker 3: 14:53

You know nothing exactly, can't even imagine yeah, I looked, I happened to my my mom and found my old act paperwork when I took the college testing back in 1984. I think it was wow and the school I sent that score to the school ultimately that I attended and that showed up in that paperwork. Their tuition was twelve hundred dollars for a semester.

Speaker 1: 15:21

For the year.

Speaker 3: 15:26

So I mean it's just again. So way back then it was a little state school, so it was. But the private schools that I didn't attend, but I sent the paperwork to, were 5,600 and 5,400, I think tuition for the year. So yes, the numbers have greatly exploded. Um, for sure and you know we can you know that's a whole other discussion as well as well they raise the prices. We still come. So why not raise the prices? Sure, it's the captive market exactly, but anyway.

Speaker 3: 16:00

So yeah, but so the looking back on the, I guess the high school kids you know, there I think there's also a lot of who's going to do what as you're rearranging how parenting is going to go, you know, do we, does everybody go on the visits? Does somebody take charge of figuring out the finances and somebody else take charge of the visits, which often work? You know, divide and conquer was often a family strategy when families are intact. But now can you? Why are you visiting those schools? We can't afford them.

Speaker 3: 16:34

Kind of challenges might come into play, but in reality maybe you can't afford them because that's the other thing is, when you get into college, planning a lot of cases you don't know what the college is going to cost until after you've really worked the numbers and understand the process. Because you know, as an example, stanford launched, you know, released a press release that said any family whose income is under $100,000, tuition, room and board, everything is zero, is zero, free, you do not pay. If your family income is under 150 000, then tuition is free and just pay for room and board. Well, based on that, you know. And when they say family income, what do they mean? When, in a divorce situation, right, and you're in the middle of a divorce and you're saying, well, you know, so it's time to get some clarification, which is another complication.

Speaker 3: 17:31

But in a lot of situations, if your student get into Stanford, that's another challenge because their acceptance rate is in the 3% range now. So you know they take a lot of very talented kids and is what's required to get in, and many more apply than they can accept. So even academic rock stars are being denied at Stanford. So that's the next challenge. But again, it can work out where you've got a lot of work to do and the divorce is just making it that much more complicated. And if you're in the divorce process while college is happening as well, I I see it just getting overwhelming for most families and a lot of times that's why they call me is. We're just overwhelmed by all this and we can't let college fall by the wayside. Tell us what we need to do and push it through. That makes a lot of sense, a lot of sense.

Speaker 1: 18:25

And so, as you're talking, as we see families break apart and reconstitute themselves in new ways, you're creating a new identity for yourself, a new identity for yourself as a family system. And why not, in the midst of that recalibration or reconstitution process, do so in such a way that it actually makes college more achievable financially for your kids. Seems like I never think of this divorce or separation as not never, but I mostly don't think of it as a potentially beneficial situation. Usually, we just focus on the negative of it. But I'm hearing from you that there could be some real positives in terms of making college education more affordable for the kids if the parents understand some of the opportunities that are out there and get the advice that someone like you can offer.

Speaker 3: 19:20

Yes, absolutely. But again, just to be clear, what it really really is is making lemonade out of lemons, right, right. So, yes, college may be more affordable, but it probably the fact that college is more affordable is not going to make up for the fact of everything else got a lot less affordable potential. I mean. So the cost of the divorce is going to be much greater than the college benefit. And the reason I say that is because I have a lot of parents say things like well, this is so unfair, we should just get divorced, then we could pay for college. And in jest they're right. In reality, once you've been through a divorce, you know that that's not anywhere near accurate, but it seems that way to some people and say well, if I'm divorced, then we get all these benefits.

Speaker 1: 20:09

Well, I definitely wouldn't institute a divorce for college, but if you're already getting divorced, it seems like a great opportunity. Like you said is squeezing that lemonade out, exactly.

Speaker 3: 20:18

And that was my point right. Yes, if the divorce is happening and you need to do it for other reasons, well then, do it in a college efficient manner if you can.

Speaker 2: 20:29

But it's not easy. So is the point of being somewhat of a mediator between the divorced parents. They sit down with you together to plan this.

Speaker 3: 20:38

Yes, right. So I mean I give the parents you know when I'm working with people sometimes I'm working with just the parent that kind of again gets stuck with the college process because that's the way it is Right. They're in charge. They have to make it happen. They care enough to work it out and make it help, you know, and figure it out Whether that's because they're the one that's willing to do the work. They're the one that's willing to do the work, you know, and maybe the other parent is happy to pay, but they just aren't going to be doing the visits and the planning and the forms and the you know, whatever. Or it could be that they have to do everything, they have to pay for it, all that type of stuff. So I guess that's kind of that question.

Speaker 3: 21:19

I mean it's much more. It's much easier when we get to the young, very young kids, right, it's much easier to say well, it's much easier. When we get to the very young kids, it's much easier to say well, that's a problem for another day. It doesn't work when you have a high school sophomore. That's a problem for six months from now or a year from now. The divorce won't even be final and the ramifications of the divorce will start coming into full play.

Speaker 1: 21:40

Well, I can see a provision of an order saying that the parents are required to contract with a college financial specialist and work with that person in good faith to achieve the best combination of college savings possible. Blah, blah, blah. Some language that basically just gets the professional in place and then doesn't try to predict what all of the nuance of the outcome is going to be, because it's impossible to do so, but just get them there and have them work in good faith to follow the advice, Because we do that with selling a house all the time. We'll order a house to be sold. You agree on a realtor. You follow their advice to set the house. At the time We'll order a house to be sold, you agree on a realtor. You follow their advice to set the house at the best commercially reasonable price. You follow the recommendations in terms of making repairs. So that same sort of model in terms of language can be used for financial planning for college as well, I would think.

Speaker 2: 22:40

Is this also something that a special master could be appointed for dealing with down the road?

Speaker 1: 22:47

Yeah, but I think there's so few of them that I can't. It'd be hard to imagine a judge to do that. But that other idea what would you do if you got an order like that? If parents came to you and said, hey, we have this order, we have to work with a financial college, financial planning specialist, specialist, how would you feel about getting an order like that?

Speaker 3: 23:08

I mean I I I do it already, but I'm much more of. These are the facts. If you do this, this will have you know here's the benefits and here's the drawbacks. And if you do that, here's the benefits and here's the drawbacks, and if you do this, but in end I don't know which benefits and drawbacks are most important for your situation. You know, some people are like if it's going to save me money, I'll do it.

Speaker 3: 23:29

Other people are like, no, it's important, my kid go to that school. Instead of that school, I'm willing to spend more money. So if one parent is saying I'm willing to spend more money to get the school we want and the other parent is saying I don't want to spend more money, I don't know. I try and stay out of that part of it. It's out of your hands. I can do the math and say this one, it will be more expensive than that one, and the need-based aid projections and that kind of stuff. And then maybe I can say, well, if we're going to go to that school, we should do this. On the need-based aid side of things, we could change how we separate assets and that would make it better change how we'd separate assets and that would make it better, but it sounds like the order is just getting there, yeah, yeah.

Speaker 1: 24:10

So in that order, may have to, may have to explicitly prioritize the goals.

Speaker 2: 24:15

Correct.

Speaker 1: 24:16

So that would then help someone like Brad do it Right.

Speaker 3: 24:20

Exactly, and I think that's the challenge of I mean again, I don't know. I it's saying I don't understand what exactly where my authority stops and starts, and that kind of stuff. So in general, what I tell people is I will work for you, be aware that if you let them have the 529s, it's their money and they can do what they want with it. So if you're afraid that you can't trust them, then you probably don't want to allow that to happen as an example, and I would say that at any point. Right, but I would make a special point of it if I'm working for a particular parent, if I'm working for both parents. Now it's, you know, it's a little tighter challenged as far as well. These are options and they all have pluses and minuses, because it really boils down a lot of times too, like one parent earns $120,000 and the other parent earns $60,000. Who should pay more for college? Should it be equal, or should it be based on income, or I don't know? I don't know. There's no right answer there.

Speaker 1: 25:28

Yeah Well, I can see your services being really useful too in a collaborative divorce process.

Speaker 3: 25:33

Yes.

Speaker 1: 25:33

Are they bringing?

Speaker 3: 25:34

in. Do you?

Speaker 1: 25:35

ever participate in those? Yes.

Speaker 3: 25:37

I've been part of the collaborative council here in in the Milwaukee area in the past so I've council here in the Milwaukee area in the past.

Speaker 3: 25:43

So I've there's this kind of in my mind. To oversimplify it, there's kind of the three levels. There's the collaborative divorce, where everybody at the table has agreed that this is going to work out collaboratively or we're going to walk away and you have to start over with somebody else. Then there's the mediation, where there's just one person kind of in the middle, you know, kind of corralling things and making sure you understand the rules and stuff, so there's not as many people involved. And then, of course, there's just the general divorce, where we're going to work it out. We each have our own attorney. We could end up in court or maybe we'll settle out of court, but the old style, but the old style, and I think there's a place in all of those areas for better understanding of how college is impacted by whatever it is you decide to do.

Speaker 1: 26:32

Yeah, for sure, completely, get that. Well, I digressed you off track. So we talked about college kids, we talked about sophomore late stage planning for the high school student.

Speaker 3: 26:49

What's the next level earlier than that right? Well then it's just the younger kids, where college is not an immediate concern. And I think now there's a. I think there still needs to be some sort of agreement on how we dealing with college, because I think most parents don't realize when we just completely ignore it, what our agreement kind of inadvertently says is we'll fight about that later, don't want to talk about it now, we'll fight about that later, and if you agree that that's what you want, great. But I don't think most attorneys explain it that way.

Speaker 1: 27:27

I don't think most attorneys explain college planning at all. All right.

Speaker 3: 27:31

Yeah, yeah, exactly Because and that's the reality, right, and what, when it does come up, most attorneys advices don't put anything in writing, because then you'll have to do it. And if we, and right, and that's where I think some you know, as we talked about in the last episode, of having something that's a little clearer, even if it's not part of the agreement, but at least because I think there's also some state by state issues of well, this is how it works in this state, but it works differently in that state, and I can't keep it all straight and I think most no parents can keep it straight. I think attorneys that work in multiple states probably can't keep it straight. Attorneys that work in multiple states probably can't keep it straight. But I think there's a lot of challenges there of well, can we compel parents to pay if we want to? Does it have to be in writing or could we just do it without writing? I mean, there's been some situations where students have sued parents and forced them to pay for college, where that never would have worked had the parents been together, but because they were separated, somehow the divorce felt like the student was getting the short end of the stick and they stuck it to both parents somehow, I think. But anyway, you would know more about that at night perhaps, but that's the reality.

Speaker 3: 28:41

Is colleges, again, kids are adults Theoretically, maybe it's nobody's responsibility, but the kids. Kids are adults theoretically, maybe it's nobody's responsibility but the kids. But when you look at financial aid, they certainly consider the parents an important piece of the puzzle. When you fill out the financial aid, they're going to look at the parents' income. So there's that real challenge of, well, your parents earn hundreds of thousands of dollars a year, so you as a student don't qualify for anything. Yeah, but my parents said they're not paying, right. Well, then go back to them and tell them they have to because we're not paying either. Right, and that's where that weird leverage comes into play of. And then another important thing to realize, I guess and I'll cross all of this as well is for the fafsa, there's certain rules, but there's a lot of colleges that do what's called the CSS profile, which is an additional financial aid form, and a lot of times that form is filled out by both parents and all new spouses, so they will look at the income and assets in a blended family of everybody.

Speaker 3: 29:49

I wondered how that happened. Okay and that may you know. And again, they may or may not take it into account in different ways. And when it comes to that side of it, we're talking about schools like the Stanford's and the high, the high end schools that are giving out full rides because of your financial situation. They want to know more information. They may not give a full ride to a family where dad's a professional baseball player and makes millions, but they happen to be divorced and mom doesn't. You know. They might. They might look at dad and say, well, dad could pay if you want it to.

Speaker 1: 30:23

That makes it even more. That makes it even more interesting to me that under a certain income threshold they don't even look at your assets because you could have somebody who has Well, again, that's the FAFSA. Right and the FAFSA, the CSS profile, just the.

Speaker 3: 30:36

FAFSA, so all colleges work with the FAFSA. That would be all 2,000 plus colleges. There's about 300 colleges that, in addition to the FAFSA, also get the CSS profile.

Speaker 1: 30:49

It's just fascinating, even just on the FAFSA side, because you could have someone who's literally a billionaire, who only has $50,000 in income, and they would get Maxima made Correct. That's fascinating.

Speaker 3: 31:06

Right, well and again, that's the system, and with the new changes, that's fascinating, right, well and again, that's the system, and with the new changes you can. Actually, it's based on your income and your AGI, and in some cases you can manipulate your AGI by putting more money in retirement. As an example. Right, if I earn $70,000 and I want to get it to below $60,000, if I put more money in my 401ks or IRAs, that may help me get across the line. It doesn't always work, depending if you're a business owner or not. So another important thing to realize, right, is college planning. There's kind of a big overarching strategy, and then there's the little tactics and minutiae of if I do this, then that and that'll save me 50 bucks, or that'll save me $5,000, or that'll help me get a Pell Grant, or, and you know, sometimes it's very again in divorce, there's this interesting little tidbit around child support, not income, and now it's an asset, so that changes the rules, and you can potentially use that to your advantage, again, hypothetically saying, well, I'll give you more assets and more child support, or you give me, I'll give you, I'll give you more assets and more child support, or you give me, I'll give you, I'll give you more assets if you give me more child support. You know, and again, if you can, in some states, if you, if both parties agree, they'll just let it. They'll rubber stamp it pretty easily. Other places you can't adjust the formulas and they're not going to let you play those games, but you could do that and get a lot more aid potentially. So, yeah, so I think.

Speaker 3: 32:37

But I guess, circling back around to the very young kids that's what we're talking about right Is, if you were together, you were saving 300 a month per child per for college. Now that you were together, you were saving $300 a month per child for college. Now that you're separated, are we going to continue that? Is college still a goal? Can we afford to do that? Should we do that? If we're going to do it, who's responsible? Again, is it contractual, in writing, or is it? We'll do the best we can, we agree? And then maybe, if it's not, if it's again and I would defer to your attorney well, if it's a verbal contract, is that with? You know, if we put it in writing, should we put it in writing, saying that it's intentionally not binding? Because if we don't put it in writing that it's not binding. We might be able to argue that they said they were going to do it, so now it is binding.

Speaker 1: 33:36

Yeah, there's lots of different legal theories, lots of different things around that, like statute of frauds, when you have to put something in writing if it's a contract, and just all sorts of different contract theories that would be implicated there. That are a big no, thank you.

Speaker 3: 33:54

Exactly. You know all that stuff. Talk to your attorney, because every state's a little different and you know. But I think that's the challenge of again when you have very young kids. It's going to come up much later and there's a good chance. Life as we know it is substantially different. Maybe there's remarriages or blended families, or maybe that student grew up to be the academic rock star and wants to go to Stanford, but because they're going to look at both parents, they're not going to give you any aid at all. And Stanford's 85,000 a year. One parent thinks that's a great idea and the other parent says that's not such a good idea. It doesn't want to pay their share, whatever that means, right.

Speaker 1: 34:36

And that's a great.

Speaker 3: 34:37

Do you want to deal with when you've got a four-year-old and that's a great?

Speaker 1: 34:42

segue to talk about, if we can, the the rock star and the student athlete. You had mentioned that there might be a couple specific things about those folks.

Speaker 3: 34:52

Right, yeah, exactly so right. The additional complication, you know. So divorce is one of those things that makes college planning more complicated. But there's many others, like if, if your family is involved has business owners or rental property owners, you can do things like hire the kids in the business and get some tax advantages. You can set up tuition reimbursement plans.

Speaker 3: 35:16

You know, mom works for herself as a realtor. She sets a tuition reimbursement plan for her employees. Well, surprise, surprise, who goes to work for her One of the kids? And she says well, just like these other places, if you get an F or better, I'm going to reimburse you for your college. Can you do that? You can. Is it a good idea? Maybe, right. And then you factor that in and say, well, if I'm hiring the kids in my business and we're divorced, I'm, you know, technically I'm doing it for tax purposes, but and it's their money but I want you to give them an equal amount of money outside the system to be fair. It's like well, wait a minute, you're you know it's not fair because of whatever your business is taking advantage of it or what. So I get more.

Speaker 1: 36:05

You're paying maybe a third of what I am, because you're writing it off as a tax deduction and it's all post-tax income for me.

Speaker 3: 36:13

Exactly. And then right. And you could argue back and forth all day long about well then, start a business and pay them my way, I don't care. And then when?

Speaker 2: 36:22

that parent tells the child now an adult almost that that parent is holding the college bag and was supposed to be, you know, using it for their college. And that child confronts the parent, you know, in my office, saying I want the bag, I don't. I don't trust you to continue to hold the bag in this divorce. And I mean I had one real recently say that essentially those words you know, I want the bag, I don't trust either one of you. I want to go to college and I want what I've been earning and what you've been promising me.

Speaker 3: 36:59

Yes, absolutely. And another very common thing that I've heard is we were divorced 15 years ago and now we're at college and one parent says I make no money, he makes a ton of money. Or the other way around whatever they should pay for college, they make all the money. And then the person, the high earner, says I've been paying crazy amounts of child support for years and years and years. Where did all that money go?

Speaker 1: 37:28

oh yeah yeah, and we can refer our listeners back to our podcast episode. What is child support for right?

Speaker 3: 37:37

yes and but again, expectations of child support is child support. It is not being safe for college. That needs to be separate, if that's, if that's in fact the reality, and here it is in writing. We talked about it back then because you know again, I'm sure you guys deal with this when things, people are looking back on something that happened five and ten years ago, the two versions of reality are drastically different. In the same meeting, oh yeah.

Speaker 2: 38:09

Or they've told the children about that agreement in the first place. You know.

Speaker 3: 38:14

Right, exactly so, right. So I think that's when you start talking about you know people that have very young kids. Well, again, anything where you're not really in the college process and you're thinking, well, we're not visiting, we didn't. Where you're not really in the college process and you're thinking, well, we're not visiting, we've got a 10-year-old, they're probably going to college, but we don't know where, we don't know what it's going to cost. Right now they're still talking about cowboy and firefighter. When will they get real? I don't know, and we'll deal with it then. I mean, I think there's just again that opportunity to get yourself in a little bit of a bind and trouble.

Speaker 1: 38:49

Although those actually are real options in Oklahoma.

Speaker 3: 38:53

Yes.

Speaker 1: 38:55

It could be a cowboy or a firefighter, although I'm not sure college is required. There you go. Well, that's really fascinating. Is there anything else, brad, that?

Speaker 3: 39:11

you think we need to know that. We just weren't smart enough to ask you. Well, again, college planning is not a one or a two hour podcast. It's a lots and lots of hours of parents and students working together and really laying it out. And you know, there's things that parents can do early, when the student isn't ready, like saving and investing and planning and some of that kind of stuff. And then there's a whole new round when you get to the late stage of now the students involved and we really got to hit, you know, get into the meat of that as well where you may have saved a ton of money and everything's all great as far as having the finances figured out. We still have to do the visits and the testing and the applications and all that stuff. So that you know the early versus late stage.

Speaker 3: 39:59

But again, I think for a lot of families it's a little more complicated than it used to be and it's going to take more time than it used to. And it's a process, right. You start wherever you start and then start learning and visiting and understanding. And then you know the student says I don't like these kind of schools. And then you start over with the kind of schools they think they like and then you realize well, they don't have the academics to get into those schools. So then you have to go re readjust for that and you know they change their mind of what they want to be when they grow up or but and things like divorce and things come along and rock the boat where you do the best you can. But it's going to take some time and effort and it's like I said, it's a process. You don't work it out one time. You do some things and then you go learn stuff and you go back and apply what you've learned and kind of take the next step. And you know sometimes there's lots of really clear paths and sometimes you know I have three kids my two oldest, you know very much, knew what they wanted to be when they grew up.

Speaker 3: 41:04

That part was easy. I've got a 16 year old soon to be 17. That part was easy. I've got a 16 year old soon to be 17. She has a tough time with a career path and career path is kind of the first step in. How do you what kind of majors might be appropriate? You know, if you want to be in genetics counseling, you go down this path. If you want to be in business, you might go down that path and it's a bit of a challenge and that's something I is new to me, even though this is my third kid, you know. So all the challenges are different. And then, and it's- just a process.

Speaker 1: 41:37

Well, we can't thank you enough for being willing to spend your time with us today. I, linda, I'm not going to speak for you, but I was fascinated by this information. I was completely ignorant about all of the different nuances of it, and so I found it extremely informational, and I'm just really grateful, brad, for you spending the time with us.

Speaker 3: 41:58

Yeah, thanks for having me.

Speaker 2: 42:00

Me too, thank you.

Speaker 1: 42:02

And so if you want to learn more about Brad, he's got TamingTheHighCostOfCollegecom. It's a wonderful website. He's got tamingthehighcostofcollegecom. It's a wonderful website. He's got tons of information and resources there. I've sort of played around on it a little bit and there's just so much there. That would be your first stop to find out more about how to get ready to begin your financial planning for college. If you want to contact Brad, he's got his contact information there as well, and he also has a podcast Taming the High Cost of College. So check that out. All of this, all of the links, are going to be in the show notes, so please do follow them and learn more about Brad and all the different ways that he can help you through his site, through his podcast or individually if you want to get in touch with him. So thank you all and have a great day.

Speaker 2: 42:47

Thank you.

Speaker 3: 42:49

Thank you. Disclosures. The information provided to you today is for educational purposes only. It is not intended to be specific recommendations or advice. Please consult with a qualified professional before acting on any of this material. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.

Speaker 3: 43:14

529 College Savings Plan Disclosures. Investors should carefully consider investment objectives, risks, charges and expenses. This information and other important information are contained in the fund prospectuses, summary prospectuses and the 529 product program description, and other important information are contained in the Fund Perspectives, summary Perspectives and the 529 Product Program Description. These documents can be obtained from a financial professional or directly from the plan's website. Please read them carefully before investing. Depending on your state of residence, there may be an in-state plan that offers tax and other benefits, which may include financial aid, scholarship funds and protection from creditors. Before investing in any state's 529 plan, investors should consult a tax professional. If withdrawals from 529 plans are used for purposes other than qualified education, the withdrawal could be subject to a 10% federal tax penalty, state penalties, federal income tax and state income tax.

Speaker 3: 44:11

Brad Baldrige's Disclosures. Brad Baldrige is a registered representative with Cambridge Investment Research Securities are offered through Cambridge Investment Research Inc. A broker-dealer and member of FINRA and SIPC. Brad Baldrige is also an investment advisor representative with Cambridge Investment Research Advisors, a registered investment advisor. Baldrige Wealth Management and Baldrige College Solutions are affiliated. Cambridge and the Baldrige companies are not affiliated. The registered branch location is at 10521 West Layton Avenue, suite 200, greenfield, wisconsin, 53228.