Florida parents who have established a college savings account for their child may be concerned about what will happen to the account if they divorce. When parents end their marriage, all marital assets must be divided, including savings accounts that were meant to cover a child’s future educational expenses. A divorcing parent may be concerned that their soon-to-be ex-spouse will use a college fund for their own expenses or to pay for the educational expenses of future children or stepchildren.
Divorcing parents may be able to include provisions about how a college fund should be used in their separation agreement. A separation agreement is a legal contract that stipulates how marital property will be divided after a divorce. When divorcing parents have a college fund, the separation agreement might explain how the fund should be used and what kinds of withdrawals are permissible.
There are several different kinds of college funds, and some are more flexible than others. For example, 529 savings plans and Coverdell ESAs allow a parent to change the beneficiary and withdraw funds whenever they want to. On the other hand, a custodial 529 plan holds money that must be used for a specific child, and the beneficiary on a custodial account cannot be changed.
A divorcing parent who has concerns about their child’s college fund may want to contact a Hillsborough County high asset divorce firm. An attorney may be able to represent a parent during property division negotiations and ensure that a child’s college fund is dealt with appropriately.