As soon as a child is born, some North Carolina parents start worrying about college costs. Those worries can intensify if a couple decides to divorce.
According to a recent TD Ameritrade study, two-thirds of married couples fail to put financial plans in place in case a spouse dies or the couple divorces. This is true even though around 40 percent of couples end up in divorce court. If a couple has no financial plan for a divorce, paying for college can be more difficult. The College Board reports that tuition, fees and boarding costs for private schools averaged nearly $47,000 for the 2017-2018 school year. Meanwhile, public state school bills averaged $20,770 per year.
Experts say that divorcing couples should take a few steps to protect their college funding plans. The first step is to remain realistic. The first priority in a divorce agreement will be to provide support for spouses and minor children. This means that while some states require divorced parents to pay for college, the actual school a child attends may need to be adjusted based on post-divorce finances. The second step is to invest in a 529 plan, which allows money to accumulate tax-free if it is used to pay for a child’s education. If a couple started a 529 plan before divorcing, a plan for the account should be included in the divorce agreement. Finally, experts recommend that divorcing individuals seek the advice of a financial planner to help them understand their finances and their options going forward.
North Carolina residents considering ending their marriage might find it helpful to work with a divorce attorney. An attorney may be able to protect a client’s interests and negotiate fair agreements on college tuition plans, asset division, spousal support, child support and other important legal issues.
CNBC, “How to keep your divorce from sabotaging your children’s college education,” Lorie Konish, May 18, 2018