03/11/2014 04:08 pm ET Updated May 11, 2014

Divorce Settlements and Higher Education

Parents typically have a legal obligation to support a child until the child is emancipated. An adoption that terminates the original parent-child relationship may shift the support obligation from the biological parent to the adoptive parent. Traditionally, emancipation occurs at adulthood although there may be a continuing obligation to support a disabled child or legislation may impose special obligations. Child support obligations cannot be eliminated by a private contract or discharged in bankruptcy.

Some states impose an obligation upon parents to pay for their child's college education while other states do not. Any college education obligation typically ends when the child earns a degree or is emancipated. Another possibility is a divorce settlement agreement in which a parent assumes a future obligation to pay for a child's college education. One should always be cautious concerning promises to pay money in the future, not only from the viewpoint of collection but also understanding precisely what obligation has been created. This comment reviews a recent New Jersey Appellate Division court decision that interpreted the college education language of a divorce settlement (Rossi v. Livingston).

At the time of the divorce in this case the children were emancipated. The son was in the Marines and the daughter had recently graduated from Rutgers University. Additionally the daughter and her father had become estranged. With their attorneys, the parents created a detailed Divorce Settlement Agreement. This settlement was incorporated into the divorce judgment.

The critical language in the divorce settlement, in brief summary, indicated that the daughter might enroll in graduate school or law school and in that event either parent could apply to the court for a determination that she was unemancipated. Regardless of her emancipation status, each parent agreed to pay 50 percent of the daughter's post-college higher education costs defined as tuition, room and board, books and school fees minus applicable scholarships and grants. The father was to receive a copy of the daughter's class schedule, grades, and financial aid information. If she failed to maintain a C grade point average, neither parent had an obligation to contribute to her higher education.

Ultimately the daughter was accepted to Cornell Law School at a total cost of $74,580 per year. The father politely refused to pay toward this expense on the grounds of financial difficulties, their continued estrangement, and his belief that her mother had received an inheritance earmarked for the daughter's college expenses.

In the resulting court proceeding, the father complained about not being consulted concerning the daughter's choice of law school since less expensive law schools were available. He offered to pay $7,500 per year conditioned upon her attendance at Rutgers Law School, her living with her mother, and reporting her academic progress weekly to him. The trial judge rejected the father's proposal and calculated the father's total obligation for his daughter's Cornell Law School education to be $112,500. The Appellate Court agreed with the trial judge having interpreted the agreement as written without additional conditions.

There are several important lessons in this situation. In virtually all circumstances, a court will not rewrite a contract or impose conditions not contained in the contract. A divorce settlement agreement is essentially a contract that has been approved by the divorce court. Additionally, both parents in this case had legal counsel when the divorce settlement was created. An expense cap or language restricting or conditioning the choice of a graduate or law school was not in the divorce property settlement. In the absence of a demonstration of significantly changed circumstances, something the father was unsuccessful in proving, the divorce settlement agreement stands.

A related issue, not part of this case, is the division of a higher education degree or professional license obtained by one spouse during marriage. Particularly where one spouse worked to put the other through advanced education, some statutes and court decisions allow the working spouse's financial contribution to be recognized and addressed. Some valuation formulas consider the enhanced earnings attributable to the degree or license. A continuing controversy surrounds how to accurately and fairly value the degree or license. Additionally, determining the appropriate percentage division to apply to the valuation is difficult. Some courts indirectly approach the degree and license issue by simply increasing the alimony or spousal maintenance award to the contributing spouse. This segment of marital property law is unsettled.

Certainly in all divorce and related settlement situations, an experienced family law attorney should be consulted.