Currently, we each pay half the expenses for our kids’ attendance at their private schools. I agreed to split that expense now, knowing their 529 money should pay for most, if not all of their expenses for undergraduate college.
The contract language — not the new tax law — controls how that 529 money can be spent. So if the agreement requires 529 money to be used for college expenses, but your ex used some of that money to pay part of your children’s private school expenses, you’d need to file a complaint for contempt against him.
What you won’t know until a contempt trial is whether, as your ex is standing before the court, he then has the money to pay. If not, he cannot be held in contempt. But if he has the money, he should be ordered to pay more than half of the college expenses. That way you’d have whatever financial obligation you expected when you signed the agreement.
Q I heard the new tax law changed the way money put into 529 plans can be used.
Does the new tax law impact my situation?
While getting divorced, I wanted to be the trustee because my husband has a sketchy work history and I feared he’d use some or all of the 529 money for his own needs.
At the time you divorced, it was common for separation agreements to provide that: the 529 funds could only be used to pay for the children’s undergraduate college expenses; and both parents had to agree on what college each child would attend. In that way, the wealthier parent would not be able to force the other parent to pay for the most expensive college.