There are many issues that need to be addressed while you’re getting divorced, and the list only grows when there are children involved. While it is important to negotiate child support, custody and visitation, there is another crucial situation to keep in mind: college. College tuition costs are rising rapidly, so make sure you and your soon to be former spouse include a section in your Stipulation of Divorce that defines a college savings plan, as well as other financial obligations related to higher education.
The Importance of College Savings in Divorce
As always, if you and your ex-spouse split amicably and remained friends (or civil, at least) developing a college savings strategy should be relatively easy. A great starting point for saving is your state’s 529 Plan. Here, an account can be created that allows both parents to deposit a certain amount of money per year, which can be determined during settlement negotiations. 529 Plans are an excellent way for parent’s to save money for their children’s college tuition costs because the plans allow you to invest money into stock based options, or into short-term bonds, savings and money market accounts.
Leveraging New York’s 529 Plan
If you and your spouse had a 529 Plan already in use before your divorce, and your relationship was completely severed during the divorce, don’t worry- there are still ways to work together to save for college. One option is to have a judge freeze the 529 account, which would mean that no more money could be deposited, and no funds could be withdrawn except those being used for educational costs. The account owner would still have the right to decide how to invest the funds in the account, even though the account is frozen.
Additionally, the account owner can request that the account be split, which would mean that any money would be divided evenly between the two parties. For instance, a 529 Plan account with \$10,000 in it would be split into two new accounts with \$5,000 each. In this scenario, you would be responsible for depositing funds and investing the money in one of the new accounts, and your former spouse would be responsible for the other. You would each have complete control over your individual accounts.
Hiring a New York Family Law Firm
Remember, there are a multitude of details that must be addressed during a divorce, and it is easy for a few things to slip your mind. This is why it is in your best interest to hire an attorney who has experience handling many different types of divorce cases. The lawyers at Brian D. Perskin & Associates have a strong background in family and matrimonial law, and are able to put their experience to work for you. Contact us today for your free consultation!