Most couples who are able to put a fair amount of money aside (and grow it through wise investing) focus on saving for their children’s college education. All parents want their kids to be able to get into the best schools their grades, talents and achievements will make them eligible for. If possible, they’d like to prevent them from graduating with a mountain of student loan debt.
Parental divorce can too often throw a wrench into a sound college savings strategy amid battles over property division. Even in a community property state like California, where most accumulated assets are divided in half if there’s no prenuptial or postnuptial agreement in place, determining who gets what can be cause for conflict.
Codify some agreements
Divorcing couples can – and often do — commit to keeping their child’s college savings safe and continuing to grow it. Even though you may be dividing the assets in the accounts you’ve established to save for your child’s education, you can each have your own and agree on how much you’ll each be placing in them regularly.
If you have a tax-advantaged 529 college savings plan, that’s a somewhat unique investment. Since it can only be opened in one parent’s name, only one of you legally owns it, even though it’s likely community property. However, the other spouse can open one in their name. Further, you can codify an agreement where you can’t make withdrawals or changes without the other’s permission.
Even if your child is years away from looking at colleges, it’s always smart to find a way to work together to save for their future. Even if they decide they’d rather pursue a dream that doesn’t require college, you can be prepared to help them out financially as a co-parenting team.
Each family is unique, of course. What’s important is to have experienced legal and financial guidance to protect your own interests as well as your child’s.