Planning for the Future: College Expenses & Divorce Negotiations
There are several items to negotiate during a divorce and because of this, it is easy to overlook issues that can later turn out to be essential ones. Many divorcing couples with young children do not consider the issue of college expenses and tuition because it seems years away. However, with each passing year, high school graduation dates move closer to reality.
Regardless of the age of your children, make sure you discuss how college expenses will be divided and shared between both you and your ex, and that it is specifically spelled out in the divorce agreement. Otherwise, one parent could end up footing the majority, if not all, of the expense. And it is not just tuition that needs to be agreed on. Remember to also include other expenses such as fees, books, supplies, housing, transportation, and any other expenses incurred by college students.
Whether married or divorced, school-related funds should be placed in a proper account in order to ensure those funds will still be there when the child enters college. A 529 plan is a savings plan that is used strictly for education, and whose earnings are not subject to federal taxes. If college funds are not put in a 529 plan and a married couple splits up, those funds become part of the marital estate and money that was supposed to be for your child’s education could instead be used to pay of marital debt or legal fees.
Agreeing on who will fill out the Free Application for Federal Student Aid (FAFSA) forms when the time comes to start applying for college is also important. Normally, the parent with whom the child lives with the majority of the time is the one to complete the forms. However, if the child lives with both parents equally, then the parent with the lowest income should fill out the forms since the amount of financial aid a student receives is determined by the income of only one parent. Using the lowest income could result in more financial aid.
If you and your spouse have decided to divorce, there are several issues that may need negotiated upon, such as child custody and support, property and asset division, spousal support, and college expenses. Contact an experienced Geneva family law attorney to find discuss your options and needs.