Court Erred Placing Father’s 529 Funds into Joint Title with Mother

Family Law Case Review

Case: David K. Miller v. Joy A. (Miller) Brown
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Trial court erred when it required Father to take 529 college savings account funds that Father had contributed after the parties’ divorce and place them into joint title with Mother.

FACTS AND PROCEDURAL HISTORY: During Father and Mother’s marriage, the parties contributed to 529 accounts, titled in Father’s name, for the benefit of their two children. The parties divorced in 2010. Their Decree did not address the 529 accounts, which at the time of divorce held a total of about $10,000. After the divorce, Father continued contributing to the accounts. Mother then separately opened her own 529 accounts for the benefit of their children and made contributions to them.

By the time the parties’ second child was starting his post-secondary education, the 529 accounts maintained by Father had a combined balance of about $46,000. Mother’s 529 accounts had a combined balance of about $11,000. Mother filed a petition for a college expense order. After a hearing, the trial court issued a post-secondary educational expense order, one portion of which required that all of the 529 accounts be consolidated into a single account, with Father and Mother as “equal co-owners.” Father appealed.

Father had no objection to other, fairly standard components of the trial court’s post-secondary educational expense order – other than the required consolidation of the 529 accounts. Father argued that, by requiring the consolidation, if the 529 funds went unused, Father would end up dividing with Mother funds that Father had contributed post-divorce. Mother argued that, per statute and case law, the trial court had authority to order funds set aside for the benefit of the children’s support. However, the Court of Appeals founds Mother’s argument unpersuasive, since the instant order required Father not to set aside funds in trust for the children, but to place them irrevocably into joint title with Mother. The Court of Appeals concluded that the problem could have been avoided had Mother raised the issue of the 529 accounts at the time of the divorce, but she failed to do so.

To view the text of this opinion in its entirety, click here: David K. Miller v. Joy A. (Miller) Brown

 

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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