April 28, 2016

College Saving Plans and Your Divorce

college saving plans and your divorce


It’s that time of year. Young people all across Florida are opening letters and e-mails inviting them to be a member of the freshman class this fall. It’s exciting and scary. Under normal life situations, funding higher education can be daunting. During a divorce, however, it can feel crippling. If you are divorcing and have a college savings plan, it’s important to think about how to handle those funds.

College saving plans and your divorce

Depending on your stage in life with children, you may have a little or a lot of time to save for their education. Whatever stage it is, the key to a smooth divorce transition is communication and planning. First, begin with a framework that both of you can utilize. Then make decisions about the basics, and get it written into the divorce agreement.

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This framework might include working with a 529 savings plan account. According to the Florida Prepaid College Board, “Funds in your Florida 529 Savings Plan can be used for any qualified higher educational expense, including tuition, room & board, textbooks, graduate school and much more”. Reyna Gobel, an education reporter for U.S. News, offers several suggestions for dealing with your children’s 529 Savings Plan during your divorce. 

  • Freeze 529 plan account – Freezing stops deposits, and the money already deposited can only be used for the designated child’s education. This prevents a spouse or former spouse from withdrawing money for non-education spending--incurring a tax penalty--and prevents him or her from using it for a child in a new marriage. Even if the account is frozen, investment decisions still need to be made for the funds. You may choose to have one spouse take on all the responsibilities or you may want to split them.
  • Split 529 plan account – It is an option to split the savings plan in half and have each parent be responsible for investing their part. At college entry time, each would pay the amount from the settlement, usually a percentage. 
  • Plan for excess 529 plan funds – After the child graduates, there may be money remaining in the plan. If that occurs, the remaining funds in the plan can be used for graduate courses, transferred to an eligble family member of the child, or refunded to the Account Owner.
  • Be ready for adjustments – Parents never know which university each child will attend or how much it will cost. As college enrollment approaches, be ready to make adjustments in the way you are saving or splitting the costs if it wasn’t mandated by the settlement.

Divorce can make communication a challenge, but working together to send your children to college is an important act that will nurture their future success. It might just be worth laying aside some of your own emotions to work out the financial details for them.



Board Certified Marital and Family Law Attorney Charles D. Jamieson understands that divorce is an extremely sensitive and important issue. Thanks to extensive experience and a focus on open communication, Attorney Jamieson adeptly addresses the complex issues surrounding divorce while delivering excellent personal service. To discuss divorce in Florida, please contact The Law Firm of Charles D. Jamieson, P.A. or call 561-478-0312.




My Florida Prepaid, US News


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