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Divorcing parents may need university expenses plan

On Behalf of | May 21, 2018 | Divorce |

Many Missouri parents dread the thought of paying for college expenses. This is understandable considering that higher education is becoming more expensive every year; the College Board estimates that the cost of tuition and fees rises by an average of 3 percent annually. While these costs can be massive, college is generally a good investment in the future.

The difficulties in dealing with university expenses can escalate dramatically in the case of a divorce. After parents decide to end their marriage, they will need to carry two households on the same general income that previously sustained one household. In addition, there can be additional costs associated with divorce, from separating retirement funds to arranging new housing and dealing with the after-effects of asset division on investments and other savings. While parents may have plans to save for their children’s education, every kind of family asset can be disrupted in the course of a divorce.

Some families work to save for their children’s education through a specialized account known as a 529 plan. Parents who use a 529 plan will not have to pay taxes on the funds when they are withdrawn to pay for educational costs. If a lot of money is earmarked in a 529 plan, it can be important to outline plans for how it will be handled during a divorce agreement. In some cases, parents may divide the 529 accounts. However, others may choose joint oversight over an existing account.

There are a number of financial issues that can arise during a divorce, from matters of asset division to how to include higher education in the settlement. A family law attorney can work with a divorcing spouse to represent their interests and work to achieve a fair outcome in all relevant matters.

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