Debt from college has become a difficult problem for students who have graduated from higher learning institutions. Current debt levels amount to over $1 trillion not just for dropouts of for-profit schools and graduate students but even undergrads as well. Borrowing statistics have also increased; 66 percent of bachelor degree seekers had to borrow in 2007-2008 compared to 45 percent in 1992-1993. Often parents plan to make high education possible for their children via trusts or saving accounts.
It might be a mistake to not plan to save for your children’s education, but it also might be a mistake to not discuss this topic during a divorce. Even if you are divorcing your spouse, you both are responsible for their college education. Don’t assume that this account is your children’s property and leave it untended.
The first step might be freezing the tax advantaged 529 accounts. This will stop any deposits or withdrawals to the savings account. A frozen 529 account will also protect the assets from being used for a new child from a second marriage.
Like other property and debts accrued during a marriage, the responsibilities should be split when managing a 529 account. If each spouse takes responsibility it may result in better opportunities in the future. Each spouse would be able to contribute rather than placing the burden on one parent.
If your divorce decree will keep the 529 account under only one parent, then there are ways to monitor the use of said funds. Ensure that the divorce decree specifies that the use of this money should be for education purposes only. You can also include a clause which requires prior approval from each parent before any withdrawal can occur.
Funding should also be covered by the settlement, whether that refers to a lump sum payment or a percentage of earnings. Keep in mind that inflation will increase college tuition by the time your children will be old enough to attend.
There are a lot of challenges to conquer during a divorce. All the hard work that you put in now will ensure that your children are as unaffected by the divorce as possible. Another way to ensure a smooth transition for you is to contact an experienced divorce attorney in Saint Charles today.
Whether you are going through a divorce, injured in an accident, need to file a workers' compensation claim, charged with a crime, immigrating to the United States, or need to file for bankruptcy, Mevorah Law Offices LLC can help. Our trial lawyers have over 40 years of experience helping clients throughout Northern Illinois from five offices in Lombard, Bloomindale, Naperville, St. Charles, and Chicago.
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