...of getting into college and financial aid
So, you’re getting divorced and you have children that will be going to college. You’ve contributed to a 529 college plan, but not enough, or you never started. You’re getting divorced and now money will be tighter as there are two households to support. The emotions, the finances, what do you do? Well, if you are litigating your divorce and you can’t reach a settlement with your spouse, the judge will decide. But will the judge consider what is in the best interests of your child to get financial aid…I think not. Will the judge even consider how college should be paid or will your child be saddled with loans...I think not. Will child support be decreased by any portion your spouse contributes towards college and room and board?. Leaving it up to a judge does not work towards a goal of ensuring your child can minimize loans and maximize financial aid.
Collaborative Divorce looks at what works best for the soon to be divorcing couple, and especially the children of the marriage. Profile schools look at the income of the “custodial” parent for purposes of financial aid. (https://profileonline.collegeboard.org/prf/PXRemotePartInstitutionServlet/PXRemotePartInstitutionServlet.srv). For financial aid purposes, the custodial parent is the one whose residence the child lives at for more than 50% of the year. The FAFSA form looks at the custodial parent’s income and if remarried, the step parent’s income as well. In Collaborative Divorce, you can specify who is Head of Household to be that custodial parent. The issue of child support can be handled in the document regardless of who claims Head of Household. So you would want to ensure that the lower income parent is the custodial parent in order to maximize need-based financial aid. But if there is maintenance, that counts as income to the recipient (and deductible by the payor). You want to find the right combination of support between maintenance and child support to minimize income taxes and other creative solutions to maximize financial aid. If the custodial parent owns the house, or owns jointly until the children are out of college, home equity is not considered. So whether the home is sold or there is a buyout of the equity, this must all be considered, this is where creativity in a divorce settlement is important, and this can only happen when the parties are responsible for the outcome, as in Collaborative Divorce.
In Collaborative Divorce, the team which consists of two lawyers each representing their clients, a financial neutral and a neutral divorce coach work together with the clients to create a financial plan and settlement that will be in the best interests of both parties. Do you want to leave your future with the decision of a judge, or do you want to be part of that decision making process? Collaborative Divorce is the only way to ensure the latter…refashion your own destiny.