Ideas for Handling Child-Related Costs and Finances When Divorcing
Deciding how to handle child-related costs and expenses can be one of the most complicated–and contentious–parts of a divorce settlement. Every state and the District of Columbia oblige parents to share financial responsibility for their children after divorce, but the specifics of each settlement will vary according to each family’s circumstances and financial abilities.
At a minimum, state laws demand that child support cover the basic needs of a child: food, shelter, clothing, medical expenses, and certain educational costs. However, children often require financial support beyond their basic needs. Divorcing parents should consider these supplemental costs and ensure that they’re covered in an out-of-court settlement.
According to Nancy Hetrick, a certified divorce financial analyst, when creating a divorce settlement, many divorcing couples underestimate how much they can think outside the box and use creative solutions to resolve tricky problems. Let’s take a look at three issues to consider when planning for your child’s post-divorce financial future, and creative ideas for approaching each one.
Many children are involved in extra-curricular activities that contribute to their talents, skills, and well-being. Some parents consider these activities to be as essential as their general education, but they can be pricey. You have numerous options for dealing with these costs, including:
- factoring in extra-curricular costs into your overall monthly child support payments.
- agreeing that each parent will be responsible for the costs of a specific activity. For example, one parent would pay for piano lessons, while the other would pay for a gymnastics course.
- setting up a fund with a specified amount exclusively intended to cover the cost of extra-curricular activities. The money can be shifted into a designated bank account as needed.
To keep the agreement fairly balanced, parents should be able to adjust the terms as needed to account for a child dropping or adding activities.
Most states obligate parents to support their children until age 18. However, if you want or expect your child to attend college, you should factor in these costs into your divorce settlement, even if your children are very young. You may agree that each parent will make an annual pre-decided contribution to a college savings fund, according to your respective financial abilities, until your child graduates from high school.
If your child is close to college age, you may want to draw up an agreement that establishes how the two of you intend to handle tuition, books, living expenses, transportation, and other college-related costs. The settlement should also cover issues such as which parent will have control over the college funds, where the money will come from, and what happens if the child takes a gap year or takes longer than expected to attain their degree. A certified divorce financial analyst can be instrumental in helping you come up with a feasible plan.
The only thing constant about life is change. Unexpected child-related costs can arise after the divorce is final. For example, if you or your child must stay in the hospital for a prolonged period, this can result in a myriad of unexpected costs. Such costs could include medical bills, child care, transportation, and more. Other unforeseen expenses may include child therapy, tutors, or specialized education to meet a particular need. You won’t be able to anticipate every contingency, but your divorce settlement should discuss the approach you and your ex will generally take with respect to unexpected expenses, how you can fairly share in the costs, and what to do if you disagree on a course of action.
We Can Help!
Divorce doesn’t have to be the knock-down, drag-out fight often portrayed in movies. You and your ex-spouse can come up with creative, amicable solutions that feel fair to both of you. If you’re considering divorce and would like to develop a creative divorce settlement that might mean a brighter future, contact my team at Miller Law Group or call us today to schedule a confidential consultation.