Is it a good idea to agree to pay for your child’s college costs in your marital settlement agreement?
When going through the divorce process, sometimes emotions (okay, maybe more than sometimes!) get in the way and cause people to make bad decisions. One bad decision is that you might dig your heels in against even the most reasonable proposed agreements out of hurt. Or maybe the other side plays on your guilt and gets you to agree to terms that may be unfavorable to you.
Sometimes people add college costs to their marital settlement agreements. It’s normal for parents to be concerned that since they are no longer a financial community maybe college college costs should be added to the settlement agreement. In theory, this is a nice idea. It feels like what we should be doing as parents. But should you?
My answer might surprise you…it’s probably not a good idea. Unless! Unless you have a lot of money saved, then go ahead and make it part of your agreement. But, if you are not well off, (most of us are not) then I would carefully consider whether you should agree to pay for your children’s college education in your marital settlement agreement. Why?
A marital settlement agreement is a contract. It’s legally binding. If you were to agree to pay some part of upcoming college costs (100% or 50% etc.) and your financial situation changes since the agreement was made, you will still be legally obligated to pay those costs. For instance, if you become disabled and cannot work, you would still be legally bound to provide those funds for your child.
So, unless you are comfortable financially and can survive the loss of income, I would consider carefully whether your desire to pay for your child’s college education should be added to your marital settlement agreement. A better plan would be to take stock of your finances when your child is ready to go to college and decide how much you can afford at that time. Another option would be to add language that each parent contributes to a 529 plan with language stating that the agreement can be modified under certain circumstances such as if one party loses their job or becomes ill and can no longer work. Don’t let feelings of guilt cause you to enter into an agreement that could cost you your future financial security.
