Sole Proprietorship | Planning for College

SOLE PROPRIETOR OWNERSHIP IS OVERRATED: One of the entrepreneurial lessons I am most grateful for is this: sole proprietorship is overrated.

I say that knowing it was once my default. I grew up in a family business and later ran a nonprofit where decisions were centralized, and control was familiar.

That perspective changed when we founded Compass Ion Advisors. Partnering with Jim and the rest of the team meant I was no longer leading only from my own instincts. I was regularly questioned, challenged, and redirected in healthy ways. The result was better decisions for the business and, more importantly, for our clients.

This applies beyond business. Families face the same risk. When making significant decisions, insist on being surrounded by wise and competent voices who can sharpen your thinking and correct your blind spots.

By Matthew Kane

SANDWICH GENERATION: Do your parents still own their home? New research shows that home sellers over the age of 70 receive significantly lower returns, and even lower prices.

Two main reasons: deferred maintenance and how the home is sold. Older sellers’ homes often have poorer upkeep, and they’re more likely to sell through private listings.

Help your parents protect their investment:

On Maintenance:

• Start conversations early about home upkeep (ideally before age 70)
• Prioritize maintenance now rather than accepting lower sale prices later
• Consider whether aging in place vs. downsizing makes financial sense

On the Sale Process:

• Insist on MLS listings, not private/off-market sales
• Be wary of agents pushing “quiet” listings
• Watch for dual agency situations (same agent for buyer and seller)
• Get multiple agent opinions before listing

The Big Questions:

• Is it safe for them to live in the house?
• Do parents & siblings have reasonable expectations on the role of real estate in their net worth & income needs?
• What does it really cost to maintain the property? Along with taxes and adequate insurance.
• What are the tax implications of selling the house?
• Is there adequate long-term care insurance coverage for “in-home care”?
• Are family or friends local enough to help extend their preference to stay in the home?
• What professional services are needed to help extend their “age in place” preference?

Someone needs to initiate these conversations.

PLANNING FOR COLLEGE: There’s no one-size-fits-all when it comes to planning for college expenses. Depending on goals, timeline, and approach, consider:

1. 529 Plan

• Tax-free growth if used for qualified education expenses
• Avoids capital gains tax, which may be especially beneficial for higher‑income taxpayers when used for qualified education expenses; individual results vary. Consult a tax advisor.
• Flexible, easy to contribute, and can cover tuition, room, board, and more
• Can be used for school before college, trade school, etc.
• Beneficiary can generally be changed to an eligible family member (as defined by the IRS); changes outside that scope may have tax or penalty implications. State rules may vary.
• Subject to a lifetime cap of $35,000 per beneficiary; the 529 must have been open ≥15 years; amounts contributed (and earnings on those contributions) within the last 5 years are ineligible; rollovers count toward the annual Roth IRA contribution limit and require the beneficiary to have compensation; beneficiary must be the same; plan availability and state tax consequences may apply. Consult your tax advisor.

2. UTMA/UGMA Account

• Generally treated as a completed gift and removed from the donor’s taxable estate; outcomes can vary by state and circumstances (e.g., custodian status). Consult a tax advisor
• Ownership/control transfers to the beneficiary at the age of majority under state law (often 18 or 21; up to 25 in some states), at which point the beneficiary controls the assets.
• Can be useful for long-term gifting, but less flexible for planning

3. Taxable Brokerage Account

• You retain control over how and when funds are used
• Capital gains tax applies
• Can pay for education without contribution limits or age restrictions
• Flexible if college plans change

4. Cash Flow

• Some high-income families prefer paying directly as expenses come up
• Preserves investment flexibility for retirement or other priorities
• Useful when college plans are uncertain

5. Paying Down Loans

• Helping with student debt after graduation can reduce stress and free up your child’s future cash flow
• Allows you to prioritize saving and investing for your own financial goals today

“Figuring out how much to pay for college education is one of the biggest financial decisions people make in their lifetime, and parents often leave the final call to a 17-year-old who has never purchased anything more than a bicycle.”

(Ron Lieber, author of The Price You Pay for College)

The right combination of strategies is unique for each family. What is your plan? Let’s discuss.

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*The views expressed represent the opinions of Compass Ion Advisors, LLC, as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, an investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website here. Past performance is not a guarantee of future results.