Protecting a child’s college savings during a divorce
Florida parents may not give a lot of thought to the type of college savings account that they are using until they go through a divorce. When they have to divide their marital assets, new questions may arise about the college savings and what the money may be used for. A parent who does not trust the other may start to worry that the money set aside for the child’s education could be used for other things.
A divorcing parent may want to put a child’s college savings into a savings plan or a custodial account in order to protect the money for the child that it was intended to be saved for. A custodial 529 account may be preferred over a 529 savings plan because the beneficiary on a custodial account cannot be altered. If a divorcing spouse purchased a U.S. savings bond for the benefit of their child, the savings bond can be divided and reissued as part of the divorce agreement.
Divorcing parents may be able to reach an agreement about their child’s college savings during property division negotiations. While preparing a settlement agreement, parents may address college savings and how it will be treated after the divorce. The agreement may include stipulations about qualified and unqualified withdrawals, successor owners and account statements.
A person who is going through a divorce may be able to prevent the soon-to-be ex-spouse from depleting any of the marital assets by petitioning for temporary orders. An attorney may be able to help a client protect the college savings, retirement fund and other accounts from depletion ahead of a final divorce agreement.