Pennsylvania law does not require divorced or separated parents to contribute to their children’s post-secondary educational expenses. However, parents can agree to pay these expenses in a written divorce settlement agreement. Part of the divorce agreement can be how to treat college savings and custodial accounts established for the children.

There are various ways that parents save for the children’s college expenses such as: 1) Joint bank and investment accounts, 2) Coverdell educational accounts, 3) 529 College Savings accounts, and 4) Uniform Transfers to Minor Act (“UTMA”) custodial accounts. Parents need to think carefully about how to treat these accounts in divorce. A divorce court will likely overlook the intended purpose of a joint bank and investment account and treat them like other marital bank accounts, meaning the accounts will be equitably divided between the parents. Similarly, since Coverdell IRAs and 529 plans belong to the parent, these accounts can be treated as marital property and divided in equitable distribution. On the other hand, a divorce court does not have jurisdiction over a UTMA and cannot distribute the funds as marital property.

Ultimately most parents will agree that college expenses accounts will be excluded as marital property and will not be divided between the parents. However, if the parents cannot agree, divorcing spouses should be aware that some of these savings plans may not be set aside by a divorce court for the intended purpose of paying for their children’s college expenses.

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