Child Support and Beyond: How to Handle Expenses Child Support Doesn’t Cover

Child Support and Beyond: How to Handle Expenses Child Support Doesn’t Cover

Child support is an attempt by the court to ensure that the children’s basic needs are met, and that as they go from one household to the other they have a relatively comparable standard of living. In most states, there is a formula or calculator to help determine how much child support should be paid from one parent’s household to the other household.

Generally, child support is mean to cover the basics—food, clothing and shelter. In most states, the cost of shelter is significantly greater than the amount of support that is calculated. The costs of finding a place to live with the additional bedrooms for the children are significantly more than just a one-bedroom apartment.

Calculating Non-Child Support Expenses

It’s the non-child support expenses that often cause most-divorce challenges. Imagine a case where the parents will be sharing all child-related expenses in a 55/45 ratio. This means that if they have an expense for their child(ren) that isn’t covered by their support—for example, the registration costs for a youth soccer team—one parent will sign the child up and pay for it. Then they have to contact their ex-spouse to get reimbursed for their share. As you can image, this keeps the ex-spouses in an ongoing financial relationship that isn’t automatic, as support payments are, but instead potentially causes resentment, frustration and conflict.

One solution is to create a joint bank account for the benefit of the child(ren). The parents would fund this proportionally based upon the ratio that the Chid Support Calculator has already provided. Both ex-spouses would need to agree in writing as to what expenses would be appropriate to be paid out of this account.

Of course, we can never accurately plan for all possibilities, so if a new expenses is being considered, such as child studying abroad or being invited for an internship, the parents would communicate in a format so there is a written record of approval to take funds out of this bank account to pay for an agreed-upon expenses.

There will also be expenses that parents don’t agree to share. For example, the parent who ahs fewer financial resources may not agree to a ski trip or other expensive opportunities, as they just can’t afford their proportional share of that expenses. If both parents don’t agree, then they are not to use this bank account to pay for that expense.

To ensure that each parent is playing by the rules, the parents would get together (periodically) to review all the withdrawals from the account during that period and make sure they both agree that the funds were spent in accordance with their written agreement.

When the bank account gets below a specific threshold that both parents agreed upon, they each would need to deposit additional funds, on their adjusted proportional basis, to bring the account up to an agreed-upon amount.

Finally the day will come when the account may no longer be needed. Parents may decide to close the account and either divide the proceeds by the same proportional amount that was used to deposit funds in the account, or give the funds to the child(ren). It is preferable to agree upfront and include this in the agreement; parents can always change it.

Parents want the best for their children, and in a divorce the process of seeking reimbursement for expenses is challenging—even when both parents are committed to their children and can still be civil to one another.

Source = Sandy Voit / Tangible Solutions