College costs keep going up and divorce rates remain high. For many families, these two sociological realties have great practical implications.
Let’s be blunt: how might ending your marriage affect your kid’s college plans?
Here are three things to know as you consider the responsibilities of divorced parents regarding college for their children.
It’s a myth that children are “emancipated” at age 18.
In many states, turning 18 is generally the age when a child gains important legal rights. The idea is that the person is no longer considered under the control and support of a parent.
In New Jersey, however, the law recognizes a role in divorce cases for requiring a divorced parent to contribute toward college expenses for a child of the marriage. The fact that this obligation continues past the child’s 18tth birthday does not prevent it.
529 plans should be documented in a divorce settlement
Some families are very proactive in creating tax-free 529 savings plans for their kids’ college. The accounts may be created by parents, grandparents or others.
In a divorce settlement, it makes sense to take note of any such accounts and agree on guidelines for their future use. This is important to ensure that the funds are used for their intended purpose and not repurposed or withdrawn peremptorily by the parent who is the account owner/fiduciary.
In other words, make sure that the effect of divorce on your kid’s 529 plan isn’t a negative one.
What a parent may have to pay for college depends on many different factors.
Whether you are divorced or not, many factors affect what your parental contribution may be to your kid’s college education.
If you have a teenage who is college-bound, you may already be familiar with the famous FAFSA form for federal student aid.
If divorce is in your picture, be aware that addressing in your settlement what you and your ex’s respective roles will be makes good sense. It can help to avoid a lot of hard feelings later and help your kid get launched on an exciting future.