In the aftermath of a divorce, ex-spouses split up property, the house, time with their children and pets, and various previously shared possessions—a couch, a wedding present, the family condo. But the division of assets is often the hardest split to make, as divorcing couples are not always clear on what state law requires of them financially, and cannot always come to an equal decision about who should have what.
Although most divorce cases are settled out of court, New Jersey family lawyers caution that a divorcing couple cannot violate any state laws in deciding the terms of their divorce. The state mandates that any children of the couple receive child support, a right of the child that cannot be written out of any divorce settlement. Similar to the right to child support is the child's right to his or her assets and belongings—toys, personal possessions, and financial accounts that name the child as the owner.
Determining who owns a custodial account in a child's name is not as simple, because these types of accounts require a clearly defined purpose in order to establish ownership. In a custodial account, parents can set aside money to pay for a child's high school or college tuition, or possibly to establish a future wedding fund. If a purpose is designated when the account is opened for the child, it is much easier to establish what will happen to the account in a divorce settlement. The couple can "confirm within their settlement that such accounts are to be maintained for the benefit of the children and that such funds shall be applied toward future college expenses...before either party" needs to contribute to the child's tuition.
The child named on an educational custodial account has the right to that money, so long as it goes towards the expenses of college—books, tuition, and room and board. But if there is money left in the account after the child's full tuition is paid, New Jersey family attorneys advise the divorced couple to choose a course of action—either to divide the money between themselves, or give the rest to the child without a specific purpose. If they cannot come to a decision, a judge will usually issue a final ruling. Whatever the decision, it needs to be written into the terms of the divorce.
Even if the divorcing couple has established custodial accounts for their children, New Jersey family attorneys say that in certain circumstances it may be financially responsible to dip into the fund in order to cover the costs of divorce or other legal expenses. Naming a beneficiary of a custodial account depends on the family's financial stability at the time of divorce.
The New Jersey family attorneys at Helmer, Conley, and Kasselman, PA advise couples who are considering divorce to take a look at their finances and to establish what, if any, financial assets should be left in accounts for their children. If you have questions about how to divide your assets, contact an experienced NJ family lawyer for a consultation.