College Student

Funding Your Child's Future

Your children are barely entering kindergarten and you suddenly find yourself facing a divorce. You’re probably trying to figure out all sorts of things like splitting assets and liabilities, child support and visitation agreements, but one thing we at Kevin Hickey Law Partners often find is that parents of young children don’t consider is their children’s college plans and how they will be funded. We understand, because, frankly, all of these decisions can be overwhelming during such an emotional time in your life. That is why it is important to hire an attorney that is experienced and able to help you think of things like college funding. We know what the impact the end of a marriage will have on plans such as college. The goals in planning ahead for college funding are 1) making sure your kids’ future needs are going to be met, and 2) to avoid taking the other party back to court. Particularly if your kids are young, a whole lot of life and changes can happen in nearly two decades. You will want to have all of these things settled well ahead of time.

  • Spell everything out in clear language. Putting the agreement in writing will define where it will come from. For example, mom contributes 50 percent to a 529 College Savings Plan and dad contributes the other 50 percent. Decide what expenses will be acceptable out of the college funds, i.e., tuition, room and board, meal plans, laptops, books, living expenses, etcetera.
  • Address the possible ‘what ifs’. What if your child is not interested in going to college and would prefer to enter a profession that doesn’t require a college degree. What if he or she wants to take a gap year and backpack across Europe or study abroad? What happens to the college money? When can the child take control of the money, if at all?
  • Decide if support will continue throughout the child’s undergraduate studies. Although child support technically ends when the child reaches the age of majority, it can be spelled out in a settlement that support will continue until college graduation or a predetermined number of years such as four years of undergrad studies.
  • Establish cost guidelines. We suggest looking at the cost of state universities to establish a general amount to fund or if a parent has a particular alma mater that they would like their child to attend you can establish the guideline based on that.
  • Who owns the 529 college savings plan? You will need to determine who owns the plan. We typically suggest that it is owned by the custodial parent. If it is owned by anyone other than the custodial parent, it is counted differently and can reduce financial aid eligibility by as much as half. This is due to how FASFA If the non-custodial parent owns the education savings plan, your child could end up getting less aid than they would get if the custodial parent owned it. FASFA considers the assets of the parent who files for the FASFA. They are assessed up to 5.64 percent. Disbursements from an educational savings plan held by a non-custodial parent would be considered the student’s income and assessed by the FASFA at 50 percent. Here is an example of how it works:


If a non-custodial parent gave a child $20,000 from a 529 Plan, the family could be expected to contribute up to $10,000 more towards college savings in a future year. If the custodial parent gave a child the same $20,000 from the Plan, the amount would have been already calculated into the financial aid formula and would been assessed at only up to $1,128 (5.64 percent).

These decisions are complex and not easy. Unfortunately, our firm has had clients come into our office that did not consider college funding during the initial divorce process. It is heartbreaking as a parent to not be able to provide for our kids’ needs, don’t find yourself in that situation. Hire Kevin Hickey Law Partners to help you during your divorce process to assure that your child’s future needs are met.