Grandparent 529 and divorce / shared cost of college

[Anonymous]

If you are divorced, and have agreed with your ex to share college expenses, and one grandparent sets up a 529 for your kid, does that money go towards one parent’s share (the grandparent’s child) or does the ex benefit from their ex in-laws’ gift too?

[Anonymous]

Grandparents contribution first, then remaining is split as agreed (eg equally, pro-rata to income etc) between parents.

[Anonymous]

Interesting question! If you have both agreed to share expenses that’s a very good thing in terms of maintaining peace among ex’s. To maintain that peace I’d likely say that we both benefit from the grandparents largesse. The exception is if one of the ex’s has significantly higher resources than the other and the sharing of the expense is a huge burden. Finally, you have to factor maternal versus paternal grandparents.

[Anonymous]

Grandparents can change the beneficiary I would proceed as if it doesn't exist.

[Anonymous]

Anonymous wrote:Grandparents contribution first, then remaining is split as agreed (eg equally, pro-rata to income etc) between parents.

This. Stop being greedy and pay your share.

[Anonymous]

Anonymous wrote:Interesting question! If you have both agreed to share expenses that’s a very good thing in terms of maintaining peace among ex’s. To maintain that peace I’d likely say that we both benefit from the grandparents largesse. The exception is if one of the ex’s has significantly higher resources than the other and the sharing of the expense is a huge burden. Finally, you have to factor maternal versus paternal grandparents.

That’s not how it works except if a parent is ordered to pay or agrees to it. No parent is obligated to pay except by court order.

[Anonymous]

OP here. In this situation, ex and I started 529s for our kids when we were married. They will cover probably 50 to 75% of college. Agreement states that we pay the remainder in proportion to our income, which means by share will be about 75%. My father passed away recently, and it was discovered that he had left a 529 for one of my kids. I am the successor custodian - meaning I could pay the penalty and keep the money if I wanted (not suggesting I would!). Given I’m on the hook for 75%, I think there’s a case that dad’s money should go toward my share. But I’m sure I’m not the first one to deal with this.

[Anonymous]

Do you have to tell your ex about the unexpected inheritance?

[Anonymous]

Anonymous wrote:OP here. In this situation, ex and I started 529s for our kids when we were married. They will cover probably 50 to 75% of college. Agreement states that we pay the remainder in proportion to our income, which means by share will be about 75%. My father passed away recently, and it was discovered that he had left a 529 for one of my kids. I am the successor custodian - meaning I could pay the penalty and keep the money if I wanted (not suggesting I would!). Given I’m on the hook for 75%, I think there’s a case that dad’s money should go toward my share. But I’m sure I’m not the first one to deal with this.

Tacky. You use both 529s to cover what you can and the you split it. The money is for the kids, not you. If you don’t want to contribute have them go to cheaper or state schools. Your share is very little regardless.

[Anonymous]

Grandparents go towards that parents cost.

For example, I remarried a military man. His GI bill is not helping my ex with his share of costs. No way.

[Anonymous]

Anonymous wrote:OP here. In this situation, ex and I started 529s for our kids when we were married. They will cover probably 50 to 75% of college. Agreement states that we pay the remainder in proportion to our income, which means by share will be about 75%. My father passed away recently, and it was discovered that he had left a 529 for one of my kids. I am the successor custodian - meaning I could pay the penalty and keep the money if I wanted (not suggesting I would!). Given I’m on the hook for 75%, I think there’s a case that dad’s money should go toward my share. But I’m sure I’m not the first one to deal with this.

Yes, this new resource goes towards your part.

[Anonymous]

Anonymous wrote:OP here. In this situation, ex and I started 529s for our kids when we were married. They will cover probably 50 to 75% of college. Agreement states that we pay the remainder in proportion to our income, which means by share will be about 75%. My father passed away recently, and it was discovered that he had left a 529 for one of my kids. I am the successor custodian - meaning I could pay the penalty and keep the money if I wanted (not suggesting I would!). Given I’m on the hook for 75%, I think there’s a case that dad’s money should go toward my share. But I’m sure I’m not the first one to deal with this.

Morally, I think it should go towards your share. Legally, I am not sure what the answer is.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. In this situation, ex and I started 529s for our kids when we were married. They will cover probably 50 to 75% of college. Agreement states that we pay the remainder in proportion to our income, which means by share will be about 75%. My father passed away recently, and it was discovered that he had left a 529 for one of my kids. I am the successor custodian - meaning I could pay the penalty and keep the money if I wanted (not suggesting I would!). Given I’m on the hook for 75%, I think there’s a case that dad’s money should go toward my share. But I’m sure I’m not the first one to deal with this.

Tacky. You use both 529s to cover what you can and the you split it. The money is for the kids, not you. If you don’t want to contribute have them go to cheaper or state schools. Your share is very little regardless.

Meh, I'd be willing to bet the grandparent would have wanted that to count towards helping THEIR kid pay less in college costs. NOT to have their kid's EX have a lower burden.

[Anonymous]

Grandparent's 529 goes towards your share because technically you own it.

[Anonymous]

I’m the grandparent in this situation and it should cover my child’s portion.

I’d also expect my child to not be a twit and if it made it was not possible for the other parent to cover their portion they would proceed with grace.