College Savings Plans After Divorce: What Happens to the 529 in Georgia?
College Savings Plans After Divorce: What Happens to the 529 in Georgia?
Understanding 529 College Savings Plans
529 college savings plans are tax-advantaged investment accounts designed to help families save for future education expenses. These plans are typically used to save for higher education costs, such as tuition, fees, books, and room and board. Contributions to a 529 plan grow tax-free, and withdrawals for qualified education expenses are also tax-free. Each state offers its own 529 plan, and in Georgia, the Georgia Higher Education Savings Plan (GESP) is the state’s official 529 plan.
Impact of Divorce on 529 Plans in Georgia
When a couple divorces, the division of assets can become complicated, including any 529 college savings plans that were established during the marriage. In Georgia, 529 plans are considered marital property, which means they are subject to division during divorce proceedings. The court will determine how to divide the funds in the 529 plan based on various factors, such as the contributions made by each spouse, the intended beneficiary of the plan, and the overall financial situation of the divorcing couple.
Options for Handling 529 Plans After Divorce
There are several options for handling 529 plans after a divorce in Georgia. One option is for the divorcing couple to agree on how to divide the funds in the 529 plan as part of their divorce settlement. This could involve one spouse retaining the 529 plan and agreeing to use the funds for the benefit of the child, or the funds could be divided between the spouses in a fair and equitable manner. Another option is for the court to issue a specific order regarding the division of the 529 plan as part of the divorce decree.
Legal Considerations for Dividing 529 Plans in Georgia
When dividing 529 plans in Georgia, it is important to consider the legal implications of the division. The court will take into account various factors, such as the financial contributions made by each spouse to the plan, the intended beneficiary of the plan, and the overall financial situation of the divorcing couple. It is crucial to work with an experienced family law attorney who can help navigate the complexities of dividing 529 plans in Georgia and ensure that the division is fair and equitable for all parties involved.
In conclusion, 529 college savings plans can be a valuable asset for families looking to save for future education expenses. However, when a couple divorces, the division of these plans can present challenges. In Georgia, 529 plans are considered marital property and are subject to division during divorce proceedings. It is important for divorcing couples to understand their options for handling 529 plans after divorce and to seek legal guidance to ensure a fair and equitable division of these assets. By working with a knowledgeable attorney, couples can navigate the complexities of dividing 529 plans in Georgia and protect the future education needs of their children.
Atlanta Divorce Law Group (ADLG) was founded with the mission of helping clients make informed and empowered life decisions that lead to a life without regret–what the firm calls Happily Ever After Divorce®. The firm’s team helps clients make decisions based on their own values and priorities, guiding them to discover what truly matters in times of conflict. ADLG’s end goal is not just divorce, but clarity, peace and security for their clients’ lives. atlantadivorcelawgroup.com
