Dividing marital assets is a primary focus in most divorce cases. Just as no two married couples are exactly alike, neither are the financial considerations for any given couple. Some Florida couples have far more complex asset portfolios than others, but all couples should take care to address each and every asset held within the family. It is easy to overlook uncommon asset types, which can lead to an unequal distribution of wealth during the property division process.
An example is found in college savings accounts. Often, couples open these accounts and begin funding them when their children are very young. The intent is to provide financial stability that will allow a child to pursue higher education without incurring significant debt. During divorce, these savings accounts become yet another asset that needs to be discussed.
For example, if the divorce settlement does not specifically address a college savings account, problems can arise years down the road. If the custodial parent remarries and the new spouse also has children, there is little to stop the former spouse from using funds from the college savings account to pay for his or her stepchildren’s education. That can leave little or no resources left for the child who was the intended beneficiary of the account.
The easiest way to avoid such an outcome is for Florida parents to include an agreement concerning college savings accounts within their divorce settlement. Such an agreement can clearly outline the child or children who are entitled to make use of the college savings funds. In addition, a clause can be included to address what will happen to the funds if the child does not attend college. Having these issues addressed during the property division process can avoid an unpleasant series of conversations in the years to come.
Source: Forbes, “How To Protect Your College Savings During A Divorce“, Brian Boswell, Aug. 28, 2016