how to protect my son's college fund

[Geo]

I’m 48 years old, and after working at a university for the past nine years I am going to be laid off at the end of the month after funding was cut for my position. I own my home and have never been late on a payment, and I have less than $3000 in cc debt. I’m current on all my payments and have an excellent credit rating. Given my age and the difficult job market, I’m not too optimistic about finding another job anytime soon. I will be okay financially until next spring, but then things start looking pretty grim. So, I’m starting to plan ahead in case things get bad enough that I lose my home to foreclosure and need to declare bankruptcy. I don’t have very many assets to lose, so that is not an issue. The only thing that concerns me is my son’s college fund. I have around $8,000 in savings bonds that I need to protect. I live in Missouri, and there are no exemptions that would cover the bonds. So, I need help in figuring out what I can do to ensure I don’t lose my son’s college fund, such as it is. Any suggestions would be greatly appreciated. Thanks.

[enuffznuff]

are the bonds in your name? can it be put into a 529 plan instead?

[despritfreya]

If you put $$ into a qualified eduction IRA account or a 529(b)(1)(A) account you must wait 366 days before you can file a bk. If you do not wait it is property of the estate and presumably recoverable by a Trustee.

Further the contribution cannot exceed that which is allowed under section 4973(e) or section 529(b)(7) of the IRC and, if you do not wait 721 days before filing then only $5,850.00 of the funds deposited will be protected. (I assume, but am not sure, that the cap is a per-child/per account cap) See 11 USC 541(b)(5) and (b)(6)

Des.

[Geo]

Yes, the bonds are in my name. I'm reading up on 529 plans, which seems like the best option I can find.

I'm not sure whether I'll be able to make it a full year if I'm unable to find another job.

What about cashing them, and giving them as a gift to my sons? Aren't we allowed a certain amount per year as a gift to our children? Or would that still be considered as my asset?

Also, my oldest son is 19 and lives on his own, so I'm assuming that his assets (car, savings, etc) would not count as my assets as far as bk goes?

Thanks for your help with this.

[enuffznuff]

I'd think cashing them and giving them to your son would then be an insider payment of some sort, which the trustee would want back.

[keepinitreal]

I’m 48 years old, and after working at a university for the past nine years I am going to be laid off at the end of the month after funding was cut for my position. I own my home and have never been late on a payment, and I have less than $3000 in cc debt. I’m current on all my payments and have an excellent credit rating. Given my age and the difficult job market, I’m not too optimistic about finding another job anytime soon. I will be okay financially until next spring, but then things start looking pretty grim. So, I’m starting to plan ahead in case things get bad enough that I lose my home to foreclosure and need to declare bankruptcy. I don’t have very many assets to lose, so that is not an issue. The only thing that concerns me is my son’s college fund. I have around $8,000 in savings bonds that I need to protect. I live in Missouri, and there are no exemptions that would cover the bonds. So, I need help in figuring out what I can do to ensure I don’t lose my son’s college fund, such as it is. Any suggestions would be greatly appreciated. Thanks.

Remember that if you are without income when your son starts college, he may qualify for a lot more income-based aid than he would today. It's possible that you may need to spend that money on your own survival when the time comes, and that your son will net out more than $8000 ahead in aid because of your lack of income.