Question: We are not a wealthy family and should ordinarily qualify for a lot of need-based financial aid, but we recently came into an inheritance of over $200,000. This is a one-time thing and, although we’re very grateful for the extra money, we’re afraid that it could have a huge impact on our son’s college financial aid, if we put this money into a bank account where it is considered an asset in financial aid formulas. (He is in 10th grade right now and planning to apply to some of the top colleges that have excellent need-based financial aid policies.) A casual acquaintance has suggested to us that we “hide” this money by investing in something like an antique car, jewelry, fine art, even a Steinway piano. While these ‘investments” won’t be liquid and do carry some risk, it seems that—if chosen wisely—we could sell such items for a profit (or at least recoup our expenditure) once our son has finished college, and he could hopefully land a big grant to attend one of his first-choice colleges.
Is this a strategy that we can use to avoid losing out on financial aid due to our windfall? And if it is, why don’t more families try this (or maybe they do)?