Now that you and your spouse have created a college savings plan for your spouse, what would happen if you divorce or separate? In Maryland, marital property is determined by how the property was acquired, so if the account was funded during the marriage, with marital funds (like one’s salary) then it would be considered marital under Maryland law. However, it is extremely common (and is often my recommendation to my client) for the spouses to agree to keep that account for the benefit of the children. In the case of such an agreement, you may want to think about having procedures to ensure the account will be used for that purpose, such as adding both parents to the account as owners, granting online access to statements, providing statements on a regular basis, or even using a trust for such purposes. It is possible, but advance planning is needed.
There are always exceptions, however. If the other party refuses to agree to any safeguards to prevent the money from being used for other purposes, or if the family simply can't make ends meet without accessing those funds, it may be necessary to liquidate the funds. This is not a step to be taken lightly however, because the family will end up losing out on the long term compounding effects of the savings and may have tax consequences as well.
Are you concerned about your spouse accessing your child's college savings accounts? It is important to seek the advice of an experienced attorney. Contact us for a consultation today,