For many parents today, saving for a child’s education begins before he or she is even born. With the high costs of an education unlikely to go away anytime soon, this is a prudent choice. But, what happens when parents face divorce after they’ve already established an educational 529 savings plan?

Divorce is always a difficult step to take, but it shouldn’t threaten the future opportunities of a child within the marriage. Unfortunately, some parents have difficulty maintaining a level head in the face of divorce, and may require some extra help to keep a divorce as civil as it can be.

If you face divorce and want to make sure that you can keep your child’s future safe, including funds held within a 529 savings plan, you must be intentional about addressing this issue. These types of savings plans are included in the property division portion of divorce settlement negotiations.

As you plan for your divorce and life afterward, it is wise to consult with an attorney who can make sure that your rights and priorities remain protected. Divorces do not have to be ugly, messy experiences, but without proper legal guidance an amicable, civil divorce can turn combative quickly. Be sure that you have all the guidance you need to achieve the divorce you want.

Dealing with 529 accounts

529 savings accounts are attractive to many parents who wish to provide for their children’s education in the future. Among other reasons, this is because funds placed within 529’s are completed gifts to the beneficiary, removing those funds from the taxable estate of the owner of the account.

Unfortunately, this benefit can create a number of opportunities for the funds after divorce. If you do not take action to prevent it, and ex-spouse who receives the account in the property division could re-appropriate the funds for a different beneficiary or revoke the account altogether.

In order to ensure that the funds in your 529 savings remain safe to care for the future education of your child after divorce, it is important to determine various terms of use around the account during the property division negotiations.

You must address a wide range of issues, including who the beneficiary of the account must be, whether one or both parents will own the account, and when and how you’ll receive statements on the accounts, among others.

Be prepared before the issue arises

The best way to protect your 529 accounts is to go into the divorce prepared. Be sure that you already have a strategy in place to protect your child’s future by the time you get to your divorce settlement negotiations, and understand the sacrifices you may have to make to keep it a priority.