Parents are not obligated to pay for their child’s college education. Legally, they are adults and you are no longer required to support them. Not all parents are in the financial position to help pay for their child’s college education. Of course, most parents want to contribute if they are able. If you and your spouse are fortunate enough to be able to financially assist your child with their college expenses, you may want to address this issue in the Marital Settlement Agreement developed during your divorce proceedings.
Some important considerations are:
- What is your current financial situation?
- What is the other parent’s current financial situation?
- Do you anticipate your future financial situation to be better or worse than it is now?
- Is the other parent’s future financial situation anticipated to improve or decline?
- Are there other resources/people available to assist with your child’s college expenses?
- Is it likely that your child will qualify for scholarships?
- Is it reasonable for your child to work while in college?
The marital settlement agreement should clarify how the expenses will be handled. There are various ways to approach the situation:
- Evenly split. This is a viable option for parents who have comparable earning power and similar financial situations. If there’s no reason to believe that either party will have a significant change in income, this can be an easy solution.
- Income based split. If one parent earns substantially more than the other, the income disparity can be considered when deciding what percentage should be paid by each parent.
- Assign an asset. If there are assets such as a stock portfolio or real estate, the asset can be put into a trust to fund future college education.
- Create a fund. Rather than figuring future percentages, parents can open a fund that they are obligated to pay into on a pre-defined regular schedule. It can be out of each paycheck, monthly, quarterly, or annually or on any schedule that both parties agree to.
- No obligation. Some parents may choose to not obligate themselves or each other to pay for college in specific way. An entry into the Marital Settlement Agreement can be made that simply says that each parent will contribute as they are able. Before making an agreement regarding future college expenses, it would be wise to sit down with a financial planner and a college admissions planner.
- College admissions planner. A college admissions planner can help you understand the nuances of college expenses and what school funding may be available to your child. Ideally, both parents should visit the planner together, so they are getting the same information at the same time.
- Financial planner. You should visit your financial planner without the other parent. If you don’t already have a financial planner that you work with, a good family law attorney will be able to point you in the right direction to find a planner who is sensitive to the nuances of divorce.
Obligating yourself financially to something that is happening in the future is risky if done without proper advisement. Make sure that you don’t agree to something that you’re not able to live up to in the future. The Marital Settlement Agreement is a legally binding document and is enforceable by the courts. Failure to meet an obligation as set forth in the agreement is grounds for being held in contempt of court.
You need an attorney with the necessary knowledge and resources to represent your financial interest and your child’s educational future while ensuring that your retirement is still secure. Boyd Law has the knowledge and expertise to protect your rights and your child’s rights while navigating the complexities of California family law.