In a key case decided by the Indiana Court of Appeals, it clarified two important points about family law and college 529 accounts. These are educational accounts opened by a parent or parents for payment of college expenses for their children, with a parent as an owner and the child as a beneficiary.
Normally, a petition for college expenses has to be filed before the age the child is emancipated as a matter of law at age 19.1 This was a point of contention in this new case. If not timely filed, the trial court cannot order college expenses and the 529 account would revert to the parent who it was set over to in the divorce decree. In addition, there is wide discretion in what constitutes a college expense and great variance in how courts order parents to pay certain percentages.
The other key point from this case is reflected in the fact the Mother opened her own 529 accounts after the divorce was final. The court order later combined them. Since the time for division of property had passed, which included the original 529 accounts opened by Father, the Court of Appeals found the first two accounts that existed and were accounted for in the divorce by the trial court were legally the property of Mr. Miller and the court could not subsequently join these with later-opened accounts by the Mother and order them to be used for the benefit of the child who would be going to college. The Court of Appeals reversed combining the accounts.
Stated differently by the Court of Appeals, “the trial court did not merely order part of Father’s property ‘set apart’ for the future support of Z.M. and N.M. . . . but it purported to make Mother a co-owner of Father’s property.” This is prohibited as post-dissolution property cannot be re-divided2 once the time for a Motion to Correct Error or Appeal has passed.
The take aware from this blog is colleges expenses have a certain time limit to be filed and requested. Second, although not a great deal of focus in this blog, the trial court has wide discretion in how to divide the college expenses between the parents and child. Third, college 529 accounts and other marital property cannot be re-divide post-divorce as a property division is final.3
This blog post is written by attorneys at Ciyou & Dixon, P.C., who practice throughout the state. College expenses are a technical area and domestic counsel is normally able to maximize the presentation to the court by careful presentation of evidence. Thus, chose you, legal counsel, wisely. Your children’s education may depend on it. Ciyou & Dixon, P.C. attorneys handle domestic cases of all types throughout the State. This blog post is written for general educational purposes only and is not a solicitation for representation. This is an advertisement.
- The statute has changed on this and older divorce decrees need to be examined in this light.
- Indiana Code 31-16-6-3.
- Miller v. (Miller) Brown, 03A01-1703-DR-512 (Ind.Ct.App.2017).
