Going through a divorce can be a challenging time, especially when it comes to financial matters. Here’s what you need to know about how a divorce can impact your 529 account:
- A 529 account is considered a marital asset: A 529 account can be listed with other marital property during the divorce process and is subject to being divided, just like other assets acquired during the marriage.
- There can only be one account owner: Although anyone can contribute to a 529 account, 529 programs generally allow only one account owner because of the unique individual tax benefits of owning a 529 account. In the event of a divorce, the non-account owner spouse should consult with their attorney to make sure that any financial settlement agreement covers the ownership and/or use of the 529 account.
- Account management can be negotiated: Both spouses must decide how to handle the 529 account after the divorce, according to family law lawyers. Among the available options is spouses can agree to leave the account intact or they can opt to divide the account into two accounts, each in the name of a spouse.
Remember that every divorce situation is unique, and the best approach will depend on the specific circumstances and the wishes of the parties involved. Consulting with legal, tax and financial professionals can help you navigate this process more smoothly and make the best decisions for your child's future education.
Note: The information in this blog is presented for general informational purposes only. Virginia529 does not provide legal, financial, or tax advice.