Thanks for your responses so far, and please keep them coming!
I need to make a clarification to my original post...... When we had our initial discussion with our prospective CFP, I provided him with categories & sums of $ we had saved: "personal", "retirement", "earmarked for college", as well as under whose name each was saved. I neglected at the time to identify the fact and how much of the younger son's assets for college were in a UTMA (and planned to go into a UTMA-529). The CFP was going to go home & look into the info in more depth & follow-up with recommendations. But while discussing potential options for "hiding" money from FAFSA(or more creative, albeit legal, ways to allocate it) the possibility of LI or Annuities came up, with my wife discussed as owner of the annuity due to her age (turning 59 & 1/2 by time to cash-out). It was really only when I sat down to post this thread that I realized we might be limited in our options with our younger son's $ by its UTMA or UTMA-529 designation, so the CFP may come up with the same info after looking closer at our situation.
That being the case, if we have no other means of re-allocating our younger son's college UTMA money, and if we don't want to tie up our liquid assets in any such investments in case we need to rely on them in the short-term, are we basically out of luck and faced with having to spend-down his college $ while he's in college & likely continue to have a high EFC all the while and no need-based financial aid (with the possible exception of the ONE year they will both be in college?)?
It would seem as if we fell victim to the "promise" of UTMA's as a great college-saving vehicle when they first came out, and have been paying for it ever since, via "kiddie tax", limit on transferability, counting towards FAFSA, etc.
While it's nice to have $ available to partially pay for both our sons' college, it seems it has also been a double-edged sword by removing any chance for financial aid to reduce our overall burden.
Does anyone out there see any alternate options, or are we pretty much stuck in our situation?
One other thing..... I went to both the "FAFSA-forecaster" as well as the college's own "college cost estimater" webpage & input both our "as-is" version of income/assets based on last year's tax return, as well as a version based on "today's reality" of a much lower AGI & removal of approximately $50k to either an annuity or LI, etc. I was very disappointed to find that it had almost no effect on calculated EFC, and only changed slightly the distribution of available loans (un-subsidized to subsidized) but not the amount......