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High asset divorce and college savings

Upon making the decision to separate or end a marriage, Massachusetts parents must consider various important financial matters, including college savings accounts. In a high asset divorce, it is critical to consider the long-term implications of any financial decisions, such as the protection of savings set aside for the payment of college tuition. It is possible to protect these savings and ensure that they are used appropriately.

Protection of college savings often begins with a carefully and thoughtfully worded separation agreement. Most couples will sign one of these agreements before their divorce is final. This typically outlines how finances will be divided, including retirement savings, insurance, property division and distribution of college savings accounts.

As one or both spouses may remarry a person with children and/or have more children in the future, it is crucial that a financial agreement regarding the distribution of existing college savings be clear and comprehensive. Much of this depends on the type of account in question and should include terms for qualified withdrawals, non-qualified withdrawals, tax benefits, successor ownership and the receipt of duplicate benefits. Other options include the creation of a trust or dividing savings into two accounts with separate ownership.

A high asset divorce is a complex process due to the delicate financial matters that must be addressed. When it comes to college savings accounts set aside for the benefit of a child, a parent will want to make every effort to ensure that future interests are protected. With the help of a Massachusetts family law attorney, a parent can be certain that their child's college plans are not sidetracked due to divorce.

Source: Forbes, "How To Protect Your College Savings During A Divorce", Brian Boswell, Aug. 28, 2016

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