Marital Settlement Agreements & College Expenses: Be Careful When Drafting or You May Get Stuck!
It is not uncommon to have parents involved in a divorce make provisions for how children’s college expenses will be handled financially. However, it is important to be mindful of how such agreements are drafted, or you may be stuck paying more than you anticipated!
In a recent appellate court decision, a father/former husband was sued by his child and ex-wife over a dispute involving exactly what "college expenses" means. An argument was advanced by the father/former husband at the trial court level stating that college expenses do not include room and board. The trial judge made quick work of that asinine argument, and the DCA agreed.
However, to add insult to injury, the trial judge also interpreted a provision in the marital settlement agreement to require the father to pay more than 95% of the total expenses! Apparently, the settlement agreement language provided for the parties to split the college expenses based upon their respective incomes. The former wife had remarried and was not working or was working at a minimal capacity. Based upon the ambiguous language, (and unexpected eventuality of the wife remarrying but not working), the former husband/father was held responsible for almost 100% of the entire set of expenses.
This court opinion is a good example of how drafting such agreements must be done very carefully. There should have been additional language included to address the possibility that one or both parents would be underemployed because of wealthy new spouses. By failing to recognize this eventuality, the former husband/father was held responsible for a much greater portion than had been anticipated. Additionally, he was held responsible for the former wife's attorneys fees because the settlement agreement provided for prevailing party attorneys fees.