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College Savings Plans and Divorce

Posted on in Divorce

college savings plans, Arlington Heights child support lawyerIf you are going through a divorce or anticipating one, it is no secret that the financial considerations can be the most difficult to make, after emotional fallout and childcare arrangements. There are several different financial aspects that a couple must take into consideration when considering divorce, and they are not always things that are in the immediate forefront of your attention. The idea of selling a family home and splitting assets such as retirement funds and 401k plans may be obvious, but there are other financial concerns that must be addressed as well, even if they will not immediately affect either spouse. One of these is what to do about a child’s college education plan.

Save Up for Your Child&s College Fund

If you began saving for your child’s college education as early as birth, this could be even more difficult to begin to sort out. It is not only the money that you had already put away that is in question either, but also who will bear the brunt of the financial burden in the future even that your child goes to school, whether you had put away savings for it or not. Who will save for a child’s college education can and should be considered at the onset of divorce. It is not impossible, just as it is not impossible to co-parent, to co-share money toward a common goal.

The easiest way to do this is to open a 529 savings account for your shared child. If you have already opened one of these, the decision will be who will assume control over the account—only one individual can claim ownership over a 529 savings account. If you and your soon-to-be-ex-spouse cannot come to an agreement over who will assume control of this account, it is advisable to either freeze or split the account entirely. Whoever takes control over the 529 account and assumes ownership will be the only person able to make decisions about the use of funds in the account. Other considerations regarding shared saving and consideration of a child’s college education plan include which parent should or needs to claim the child as a dependent for tax purposes.

Changes to College Expense Requirements in 2016

As of January 1, 2016, the Illinois Marriage and Dissolution of Marriage Act (IMDMA) was revised regarding which parent will cover the post-secondary education for a child after divorce. Now, both parents are required to contribute to college expenses until the child is 23 (unless good cause is shown to continue education). The obligation to pay college expenses for a child ends at age 25 regardless of circumstances.

If you or someone you know is considering divorce with a college-aged child involved, or even younger children, the most important step is to seek an experienced lawyer. Contact an experienced Arlington Heights family law attorney today. Call A. Traub & Associates at 630-426-0196 (Lombard office) or 847-749-4182 (Arlington Heights office) to schedule an initial consultation.

Source:

http://www.usnews.com/education/best-colleges/paying-for-college/articles/2015/08/19/3-important-college-funding-questions-to-answer-during-a-divorce


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