Yes, a 529 account is owned by the parent, usually. If that’s the case then it could be divided in property division.
Lee S. Rosen
Board Certified Family Law Specialist
The Rosen Law Firm
4101 Lake Boone Trail, Suite 500
Raleigh, North Carolina 27607 Rosen.com
(919)787-6668
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service but a full discussion with an attorney should be undertaken before taking any action.
How can a 529 plan or a Coverdell be “divided” as marital property? The funds can’t be distributed except for the child’s education…so what would happen if it were considered “marital property”?
What if a couple had a separation agreement stating that the Coverdells in the childrens’ name would be managed and maintained by the spouse that opened them in the first place? Would that work? I’m fairly new to the separation/divorce thing, and I guess I’m not understanding because I’m not planning a big court battle for property division. I think we can amicably divide our assets in a written/notarized agreement. Can this be done?
Greetings. The account would technically be transferred to one of the parents, usually in trust for the children, so yes, your idea works. The funds in the accounts belong to the parties, even though they are earmarked for the children. So, hypothetically, even if it would cost the fees of taking the funds out of the 529 plan, it could still be done to divide them.
By the way, the majority of our clients never see the inside of a courtroom. Someone retained me on two Thursdays ago and by the next Monday (3 days later) they were settled. This kind of thing happens all the time. Thank you.
Janet L. Fritts
Attorney with Rosen Law Firm
4101 Lake Boone Trail, Suite 500
Raleigh, North Carolina 27607
919.787.6668 main phone
919.256.1665 direct fax
10925 David Taylor Drive, Suite 100
Charlotte, North Carolina 28262
704.644.2831 main voice
704.307.4595 main fax
1829 East Franklin Street, Bldg 600
Chapel Hill, NC 27514
919.321.0780 main phone
919.787.6668 main fax
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service but a full discussion with an attorney should be undertaken before taking any action.