For many Kentucky families, paying for college is a major concern. Parents want to support their children’s educational efforts and dreams, but the cost of higher education in the United States can be overwhelming. The College Board reports that tuition for universities rises about 3 percent each year. This begins from an already-high level; a four-year private university costs an average of $46,950 each year for tuition, room and board and fees while a public university costs an average of $20,700 annually for in-state students.
The pain of paying for college can be magnified when parents choose to divorce. Divorce can add new financial complexities to a family’s life. The expense of setting up two households can be significant, and each parent’s assets can be reduced substantially as part of the property division process. While many parents have considered how to save for their children’s education, few married couples make financial plans for how to handle divorce or widowhood. This can mean revising a college savings plan in light of a family’s changed realities.
Many parents save for their children’s education using tax-privileged savings accounts called 529 funds. These funds can be withdrawn without a tax penalty so long as the withdrawals are used for an educational purpose for the beneficiary. During a divorce, 529 accounts can be divided between the parents for the benefit of their children’s education or both parents can be named as the account-holders on a single 529 plan.
Higher education costs are only one of the many serious financial issues that can be addressed during a divorce. A family law attorney can help a divorcing spouse to protect their interests and work hard in negotiations to secure a just settlement that can address a range of issues, including spousal support, asset division and child custody.