Family Law Blog
On behalf of Law Offices of Barry I. Finkel, P.A. posted in blog on Monday, April 10, 2017.
Your impending divorce may have you counting the years that you will be receiving child support for your teen. That same number typically also indicates the amount of time you have left to build your child’s 529 college savings account. While planning for college can be tricky enough for a couple with a combined income, putting back enough money as a single parent may be much more challenging. Your teen’s future may depend on whether you and the other parent can work together.
Keeping the money safe
U.S. News explains that only one parent can control this type of savings account. If you do not trust your spouse to preserve the money for your child, you may feel like your only option is to insist that you become the sole owner. It is wise to evaluate whether your feelings of distrust are truly about the potential for raiding the account, or they result from the emotional trauma of the divorce, because your child may qualify for more financial aid if the non-custodial parent is the owner.
Trust is essential, though. As Forbes magazine points out, the owner of a 529 account can withdraw the funds, although there is a penalty and taxes that must be paid. The owner could also close the account or change the beneficiary so that your child will not receive any of the money.
Even if you become the sole owner of the account, you should still authorize your teen’s other parent as a user. This does not give the ability to do anything with the money, but your former spouse can check on the status of the account and see what changes you have made or how much it has grown. You should also put the other parent on the account as the successor owner in the event of your death.
Because of the importance of your child’s higher education and the many complications that could arise from your decisions during your divorce, you should seek advice from an experienced family law attorney before coming to an agreement on the fate of college funds.
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