Asking this for a friend, here is her situation.
Her FAFSA was calculated with her biological mom and step father’s incomes from last year. Her step father made almost all of the money. Now, they’re getting a divorce, and the step father got most of the money and withdrew all his money from her college fund, leaving her with almost nothing. He will not pay at all for my friend’s college because she was not his biological child. However, the FAFSA shows her family still making enough to pay for full education, when in reality my friend and her can pay about $3000.
What can she do? Resubmission of FAFSA?
Are you talking about the current 2015-2016 school year? Or are you talking about next year?
If you are talking about the current school year, your friend needs to contact her school financial aid office. She will need to provide documentation of her mom’s divorce situation.
You don’t resubmit the FAFSA. Your friend would be asking for a professional judgement for the current year. If the school does not meet full need, it is very possible all she will be offered is a Direct Loan.
Does she receive need based aid now? How long was her mom married? Is,she receiving any spousal support? Will she be asking for this from her spouse? If not, why not?
Also, it’s really easy for your friend to open her own account here on CC. It’s a lot easier to answer questions directly than to go via a middle man.
thumper is right…the FA office would have to decide whether to adjust.
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step father got most of the money and withdrew all his money from her college fund, leaving her with almost nothing
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The mom needs to that THAT addressed by the court. One spouse can’t just withdraw a bunch of money from an account, even if he can argue that he made the greater income…even if the intended purpose was to fund college for this child/step-child. He will either be ordered to return a fair share, or some other asset will likely be awarded to the mom. The mom needs to have her atty address this issue.
There is no such thing as “his money” in a marriage unless that’s money that he can prove was kept cleanly separate and earned prior to the marriage or from an inheritance. It’s very likely that the money that went into the acct was from his earnings while married, so those dollars aren’t “his money.”
Not every state is community property. Some states are equitable, and courts can find the money, even earned , belongs to just one party. If he withdrew the money from a qualified account, he may have tax consequence. That is his problem.
I didn’t say anything about Community Property states.
Most states are Equitable Property states. I live in an Equitable Distribution state, and while a divorce is in progress, one spouse can’t just empty an account like this without that getting addressed at some point. In fact, often there will be an immediate order that spouses can’t empty accounts, take things, sell things, give property away, hide things, break things, can’t stop paying bills, can’t stop paying the mortgage, etc, while things are being decided. If one spouse does any of these things anyway, then adjustments in the “equitable distribution,” may likely be made.
Equitable Distribution states often favor situations like this mom’s…someone who earned a lot less than her husband, perhaps to take care of the household, so adjustments are made to account for that. If there are debts, she likely won’t be expected to repay half of them. She may be awarded spousal support or a greater share of assets because at this point in her life, it’s too late for her to “catch up” income-wise, asset-wise. But, it wouldn’t be right for the wife, either, to just empty the account, either.
The way the OP wrote the post, it sounds like one person filed for divorce, and then the stepdad unilaterally just emptied that child’s college fund account based on, “I earn more, so the deposits were logically mostly ‘my money,’ she’s not my blood, so I’m taking 90% out.” If that’s what happened, I doubt that will pass the smell test unless this marriage was very short-lived, which is not likely the case if he was contributing towards her college fund.
I think a whole lot more courts do see equity as the party making the most money gets the most money, especially if there were children from another marriage that he did not have any obligation to support, so the only advice that can be given is for the student to appeal the FA award for a change in circumstances. There might be a premarital agreement that most of the earnings are his, and in an equitable property states, as long as the agreement isn’t unjust, court can and do uphold them. If all the assets were awarded to or just taken by the stepfather, that information should be included in the appeal for professional judgment too. It is not a simple matter of the mother going back to the court to get ‘her’ money. Maybe the ex is gone, maybe he had a large child support order of his own, maybe the money was all in a savings account and not a protected 529. I’ve seen judges give all the assets to one party but then all the debt too, figuring that’s equitable.
However, all this doesn’t mean that FA will suddenly be showered upon the student. The mother still has income. The school might be out of any need based institutional aid for the year.
This:
““I earn more, so the deposits were logically mostly ‘my money,’ she’s not my blood, so I’m taking 90% out.” If that’s what happened, I doubt that will pass the smell test unless this marriage was very short-lived, which is not likely the case if he was contributing towards her college fund.”
is accurate.
Marriage is ~5 years.
She did not receive need based aid when they were married.
She is applying this year.
Still, spouses are not supposed to just empty accts without the court agreeing that X amount is rightfully that person’s. Your lower-income-friend needs to at least have her atty bring this up. I can think of several arguments her atty could make to convince the court that the other spouse can’t take more than half.
The marriage may have only lasted about 5 years, but if during that time, the couple had an agreement that wifey would take care of a greater share (or all) of household demands, so that higher-income husband could pursue his career/earn more money to put into savings, then a court could rule that she “earned” half of that account.
@ErenYeager
@twoinanddone That may be a state by state attitude. In my state, a long-term housewife who is at or approaching retirement age, will get at least half. She may even get more than half if the husband still has potential to earn a lot and “make up” for getting the smaller share. Imagine the long-term wife (30+ years) of a surgeon who gave up her career goals to take care of everything, so H could devote 100% and many long hours to career. If they were to divorce at age 60, when H (assuming healthy) still has the potential of earning millions, a court could award a greater share to wife, in addition to spousal support, because she has little means to be able to “catch up” or even earn enough to even slightly approach the style of life of which she had been living.
Of course, in my state, there is still the option to divorce “with cause,” which can mean also “financial punishment” for bad behaviors…mental cruelty, addiction, etc. I don’t know if adultery is still on the books, but perhaps…I know that mental cruelty and addiction still is. One doesn’t have to do “no fault” in Alabama. An aggrieved wife can present a case and the husband can end up with only the clothes on his back (or vice versa).
That is the theory of equitable divorce. In practice, it is a lot different. Often one party doesn’t have a lot of money to hire the a good divorce attorney with a good forensic accountant. The money can have been socked away in his name only, or at his employer, or in a beach house.or there wasn’t that much money to begin with. The wife might only be 45, they were only married for 5 years, she could be making the same money she was when they married, so no big sacrifice on her part of career potential. Some judges just dont think a 5 year marriage gets the same consideration as a 20 year one, especially if there are no children.
I had a client who was divorce and the parties agreed (before I was her attorney) that it was ‘winner take all’ whoever got the house got all the furnishings, the dogs, the piano, and all the debt. Both thought he/she would win. Husband won because he actually had hope of being able to pay the mortgage as his job was better. In fact neither could afford the house. Well, wife really didn’t want to be divorced, so she wanted to go back and fight about everything, especially the dogs and piano. Court found that two grown people could make the agreement of winner take all, which was not inherently unfair under the law. Prenups are okay that give the bulk of the assets to one party. Where it becomes tricky is when children are born to that marriage. That’s when child support of $20 grand per month starts being awarded outside the prenup
In the case at hand I don’t think it would be unreasonable for a couple getting married, in their 40s, her with children nearing college age, to agree to a plan where the money beyond living expenses was his. He might have been paying most of the couple’s living expenses, but she was paying for her kids and supposed to save for college too. Or not, not his responsibility. They might have lived in ‘her’ home, and the equity increased during those 5 years because he paid the mortgage. She benefits from that in the future. He might have paid for private school for her kids, for braces, for vacations. Paid much more than his responsibility of supporting his spouse.
All the OP’s friend can do for the 2015-16 school year is ask for professional judgment. If that person does appeal the divorce award, the school will wait to reassess the FA award until the divorce court is finished. We can’t say what the situation should have been, only what she can do now.
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All the OP’s friend can do for the 2015-16 school year is ask for professional judgment. If that person does appeal the divorce award, the school will wait to reassess the FA award until the divorce court is finished. We can’t say what the situation should have been, only what she can do now.
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Absolutely. And, the mom needs to find out if her soon-to-be-ex took out money that he should not have.