Handling 529 college savings plan in divorce

The cost of a college education is stratospheric. But when divorcing parents have established a 529 savings account to offset those constantly escalating costs, the implications during the divorce - and after it - are often ignored, especially when matriculation seems far removed.

Section 529 of the Internal Revenue Code creates a narrow exemption from federal income taxes for money that is earned as part of a qualified tuition program. 26 U.S.C. § 529.

Under this exemption, an individual…