Divorce and Your Child's College Savings

 Posted on October 04, 2016 in Divorce

With the ever-increasing cost of college tuition, more and more parents are giving their child a head-start by saving for their future education. Unfortunately, if those parents are married and then later divorce, there may be some concerns over what will happen to those funds. For example, if your spouse has difficulty managing money and then gets ownership of the account, the savings plan could be at risk. Alternatively, you may be concerned over what might happen if your spouse later remarries or has more children, if your child's savings would be used to pay for another's tuition.

All of these concerns, and many others, were probably the last thing on your mind when you set up the savings account. Yet, now that you are divorcing, they may plague you and leave you worrying about your child's educational future. Rest easier by learning some ways that you can protect your child's college savings account during your divorce, and how an experienced divorce lawyer can help.

Understand the Limitations and Pitfalls of Your Savings Plan

The first step to protecting a college savings plan is to know where it is vulnerable to misuse. As such, you should become familiar with the potential limitations and/or pitfalls of your particular type of savings plan. For example, the beneficiary of a 529 savings plan can easily be changed, giving your ex-spouse the ability to withdraw from the account as they see fit. Alternatively, a custodial 529 is more restrictive in terms of changing the beneficiary, but because your child can take ownership once they reach the age of majority, you may be concerned over how they, themselves might manage the funds.

Discussing the Fate of Your Child's College Savings Plan

You and your spouse likely both contributed (monetarily, or otherwise) to the savings plan for your child, and that means that you both truly do want the best for your child. With guided assistance from your attorney, try discussing the fate of this plan and how you will manage it once the divorce is final. Consider protections, such as having a provision written in that the plan is only intended for the benefit of the child, and decide if certain withdrawals might be permissible (i.e. covering rent, or for braces). Also, make sure that a successor is set up for the plan, should something happen to your spouse. Above all else, try to remember that this money really is meant to benefit your child.

Our DuPage County Divorce Lawyers Can Help

If you are planning on filing for divorce and have a college savings plan for your child, contact The Stogsdill Law Firm, P.C. for a consultation today. Dedicated to protecting your child's best interests, our DuPage County divorce lawyers will explain your options and work with you to craft a plan that will hopefully satisfy all parties. Call us at 630-462-9500 and get the skilled assistance you need today.

Source:

http://www.forbes.com/sites/brianboswell/2016/08/28/how-to-protect-your-college-savings-during-aa-divorce/#4479d35726f5