Colorado parents going through a divorce have a lot to think about. If the kids are young, child custody, visitation and child support issues are probably foremost in the parents’ minds. But parents also need to think about how they are going to pay for college-whether the kids’ college years are just around the corner or a long way off.
A parent who wants to be sure their kids will be able to go to college needs to make sure college savings are protected in the divorce process. One of the best ways to do this is to have a 529 Plan-a tax-free savings account for college money. If college savings are simply deposited in one or more bank accounts, in a contentious divorce the other spouse may be able to claim a share of those funds in the property division. A 529 Plan can help ensure that the court will view those funds as earmarked for college expenses only, and not available for any other purpose.
Another critical issue divorcing or divorced parents must consider is financial aid. Which parent fills out the financial aid forms can make a big difference in how much aid the student gets. Parents applying for financial aid are generally required to fill out the Free Application for Federal Student Aid, or FAFSA. If the child lives with one of the ex-spouses only, that parent will be the one required to fill out the FAFSA, and schools and the government will consider that parent’s income along with the income of a stepparent the student lives with. But if the parents share physical custody, and the student spends equal time with both, the parent with the lower income should be the one who fills out the FAFSA.
The end of a marriage should not mean the end of a child’s college dreams. Consulting an experienced family law attorney can help a parent ensure that funds are available for college when the time comes.
Source: Reuters.com, “Three things divorced parents need to know about college,” Geoff Williams, March 3, 2014