As couples with teenage children are considering divorce, one of the things to think about is the timing of the divorce. We have always considered the timing of divorce as this impacts the parties’ ability to file a joint income tax return. However, I had never considered how this might impact their children’s ability to get financial aid. I recently came across a post from Robert Bordett, a Certified Financial Planner and Certified Divorce Financial Analyst in Georgia, in which he shares some information he learned about the timing of divorce and its impact on financial aid. http://www.familyaffaires.com/co-parenting-work-together-divorce/.
A collaborative divorce process allows the family to consider all factors associated with their divorce, including the timing. As Mr. Bordett explains, the timing of the divorce can be crucial to the child’s ability to get financial aid. This is because the income that is considered on the FAFSA (Free Application for Federal Student Aid) form is the parent’s income for the year prior to the start of college. If a couple’s divorce is final in January of 2015 and the child starts college in September of 2015, the information from the joint tax return must be used for the FAFSA form. If the divorce is final in December of 2014, then the information from the primary residential parent’s tax return can be used instead. If the primary residential parent is the lower wage earner, this can make a significant difference in the amount of financial aid the child receives.
This is just one of the many reasons that the Collaborative divorce process makes sense. It provides the necessary information and flexibility to enable parties to consider things like the timing of their divorce.