Protecting Your Child's College Funds During a Divorce

Protecting Your Child's College Funds During a Divorce

Posted By R. Gregory Colvin LLC || 18-Dec-2018

When a divorce involves tension and tumultuous interactions, it is not surprising that one spouse or another is worried about money that has been set aside for a specific purpose, specifically college tuition savings. If you and your spouse set up a college fund that could be jeopardized in the divorce, there are steps you can take to protect the money. Setting up a plan early in the divorce process can help keep that money out of negotiations and, subsequently, safe from misuse. Our divorce attorney at R. Gregory Colvin, LLC can help you determine the best plan of action to keep your child’s savings safe and ensure it keeps growing.

What Can You Do?

There are several factors to consider and discuss as early as possible in your divorce process. These include:

  • If you are the parent in charge of your child’s college fund and your name is on the account, you can handle the future transactions. The first step in protecting your child’s account is to freeze it. This can prohibit withdrawals and deposits but does not affect growth potential.
  • If the account is a joint account, you may want to discuss splitting it into two separate accounts, but, keep in mind, this may make it easier for the funds to diminish.
  • If your savings are not already in a Florida 529 Plan, this is the time to designate it as such. This plan allows one or both parents to deposit money and can even be split into two accounts so each parent can deposit as they choose without affecting the other’s account. If a withdrawal is made, there will be a tax penalty, as this is a plan designated as educational savings only. Florida’s Pre-Paid Tuition is another structured option that allows parents to save.
  • If the option for a 529 account is too flexible, and your concern persists about misuse of the funds, you can choose to put the money into a trust and elect a trustee. It is a slightly more complicated process, but it will further protect your child’s college savings.

You can also elect to consider the savings as non-marital property so it is not part of the negotiations of your divorce. Our attorney can help you decide what route is safest to take, whether it is freezing the account, splitting it or putting it into a trust.

Our Orlando Divorce Attorney Can Help

If you are concerned that your spouse has alternative plans for your child’s college tuition savings, it is in your best interest to discuss fund protection early in your divorce. Our divorce attorney can help you determine the best steps for protecting the savings you amassed and what your options are for including stipulations in your divorce proceedings. We understand the importance of a set plan for your child’s future and we can help you continue to grow the savings.

Contact our firm to discuss your options for college fund protection. Call (407) 603-3460 {F:P:Site:Phone}.

Categories: Divorce, Family Law

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