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College savings and property division in a Texas divorce

College is expensive. Thus, many Texas parents begin saving for their child's college education soon after the child is born. These parents have several options regarding the type of account and the amount contributed to it. These accounts are often established when the marriage is stable; however, in the event of a divorce, they can become a factor in the property division of the marital estate.

While a savings account that has been established for a child's college education appears to belong to the child, it is most likely still held in the parent's name with the child as the beneficiary. As such, the owner of the account has the ability to access the money in the account and use it for other purposes. Additionally, it is possible that the beneficiary can be changed.

This may not seem to be of concern when initially looking at the couple's division of property in a divorce. However, one needs to consider the possibility of the spouse who has control of the account having other children or entering into a relationship where there are already other children. In order to ensure that the savings account is used for a specific child's college education, one will want to detail this in the separation agreement.

When a Texas couple decides to divorce, there are a number of property division items that will need to be considered. One would like to think that an account that was established for the sole benefit of a specific child would ultimately be used for that child. Regardless, in order to be certain that future events do not affect the way the account is used, one will want to take steps to protect the account as a part of the divorce's property division.

Source: Forbes, "How To Protect Your College Savings During A Divorce", Brian Boswell, Aug. 28, 2016

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