Dependent Care Assistance Plans (DCAP) in an Oregon Divorce
What to Know About a Dependent Care Assistance Plan in an Oregon Divorce: The Short Version
A Dependent Care Assistance Plan is a tax-advantaged savings account that allows you to set aside money to pay for qualified health care and dependent care expenses. It is similar to a Flexible Spending Account (FSA) but more limited in scope. A DCAP is primarily focused on work-related childcare for your dependents younger than 13 years of age. Like an FSA, a DCAP cannot be transferred from one spouse to the other. Further it cannot be used to cover childcare expenses of a parent who has less than 50% parenting time.
However, it is still a marital asset if it was accumulated during the marriage. Therefore, it is important for your Marital Settlement Agreement to take into account which spouse is eligible to utilize the funds from a DCAP.
If you choose to handle your marital asset division as most of Matthew's clients do, the other spouse would receive an asset of similar value as an offset. Matthew can acquaint you with ways to manage the balance of a DCAP in the asset division process (using other assets) to make it fair, even if it is not possible to transfer it to the other spouse or for the other spouse to use the DCAP funds.
However, it is still a marital asset if it was accumulated during the marriage. Therefore, it is important for your Marital Settlement Agreement to take into account which spouse is eligible to utilize the funds from a DCAP.
If you choose to handle your marital asset division as most of Matthew's clients do, the other spouse would receive an asset of similar value as an offset. Matthew can acquaint you with ways to manage the balance of a DCAP in the asset division process (using other assets) to make it fair, even if it is not possible to transfer it to the other spouse or for the other spouse to use the DCAP funds.
Discovery for DCAPs: Information Needed for Divorce Mediation
If you have a DCAP, please be prepared to supply information about the current balance and all contributions or withdrawals made in the current calendar year.
Valuation of a DCAP in Divorce
- The current balance of the account is usually designated as its raw value for divorce-related purposes.not divided equally.
- A DCAP is pre-tax money to be used for qualified purposes, with taxes and penalties for non-qualified withdrawals. Those factors will be considered in the valuation.
How Mediator Matthew House Will Help You with Your DCAP in Divorce Mediation
Matthew will help you navigate the process and understand the laws, regulations, and norms that apply to the post-divorce ownership and use of a Dependent Care Assistance Plan.