Grandparent Contribution to a Child’s College Expenses

Illinois’s age of majority, or the age at which a minor child becomes an adult, is 18 years old.  Although children often turn 18 before freshman year of college, divorced parents may still be ordered to contribute to college expenses.

Sometimes, though, other family members, like grandparents, will set aside money to contribute to their grandchildren’s post-secondary education. A core question that this situation raises is whether a college account set aside for a child, but owned and funded by a grandparent, is considered the child’s money in a contribution case.

Under Illinois Law, Section 513(h) of the Illinois Marriage and Dissolution of Marriage Act specifies that any account established prior to the dissolution of marriage that is intended for the child’s college education – including an account in a state tuition program under section 529 of the Internal Revenue Code – is to be considered a resource of the child.  But, any contributions made by a third party after the dissolution will be treated as contributions from that party. 750 ILCS 5/513(h).

Section 513 applies only after a child reaches the age of majority.  In re Marriage of Wilhelmsen, 2019 IL App (2d) 180898, P1, P1.  The threshold issues that must be addressed to determine if the college account is the child’s money is (1) when the account was established – before or after the final judgment for dissolution of marriage; and subsequently, (2) when the third party contributed to the account.

If the college savings account in question was established before the dissolution of marriage, the account will be the child’s money, no matter who funded it.  However, any contributions made to said account by a third party —like a grandparent— after the dissolution of marriage is not the child’s money. 750 ILCS 5/513(h).

Although the statute is silent on the specifics of grandparent contribution, “[s]ection 513(h) states that a college savings account ‘is to be considered by the court to be a resource of the child’. . ., which merely guides the court's consideration of the child's financial resources as it considers a number of factors under section 513(j) when making an award—nothing more.” In re Marriage of Wilhelmsen, 2019 IL App (2d) at P10.

In other words, section 513(h) does not control how the account is used, but it implies that the child’s financial resources are a factor that court’s consider when deciding how much each parent will contribute to the child’s college expenses.  In addition to the financial resources of the child, the three other factors that courts consider when ordering payment of college education expenses are (1) the parents assets (including retirement funds), (2) the standard of living the child would have enjoyed absent a divorce, and (3) the child’s academic performance. 750 ILCS 5/513(j).

Notably, the court has substantial discretion when allocating college education costs between divorced parents after the child reaches the age of majority.  In re Support of Pearson, 111 Ill. 2d 545, 551.  Thus, a grandparent-funded account can make a large impact on how financial support is allocated for the child’s post-secondary education.

The Law Office of Erin M. Wilson is here to help you with your questions and concerns about who will pay for college expenses.  We understand that parties can have multiple resources from other family members, and we create a plan to allocate expenses as fairly as possible.  Contact us to schedule a complimentary consultation at 312-767-4220.

NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.