The Benefits of Mediating Child Support Issues

Just because you choose mediation over litigation does not mean that Massachusetts family law will not be a factor in your situation. This is especially true when it comes to the issue of child support, where Massachusetts has Child Support Guidelines that determine how much a non-custodial parent is presumed to pay in child support on the first $250,000 of combined income the parents earn each year. The guidelines take into account each parent’s gross weekly income, then subtract the costs paid by each parent for work-related child care, health insurance, dental/vision insurance and child support for any child not covered by the order.

The calculation results in a combined available income amount from which a presumptive weekly child support obligation is determined, based on the number of children to be supported. While these guidelines were meant to simplify how child support is calculated in a divorce, they have another impact: the guidelines push divorcing parents into a cookie-cutter standard that might not work well for every family.

 

When you mediate your divorce, you generally have more flexibility in determining a child support solution that works for everyone. By allowing both parents the flexibility they need to come up with their own answers, without being confined by the usual court process, divorce mediation gives parents the supportive environment they need to create a child support system that truly works. This does not mean that mediating child support is easy, of course.

Poorly constructed, court-ordered child support systems can create tension and animosity over parenting time. Some child support-paying parents will seek additional parenting time because they feel they should “get something for their money”. Others may perceive an increase in parenting time as a way to reduce child support.

For parents who feel they’re being treated unfairly, child support payments can make them feel so angry and frustrated that they risk distancing themselves from not only their former spouse, but also from their children. Eventually, such parents may feel so alienated that they stop making their child support payments altogether, which can have serious legal repercussions if they are in violation of a court order.

Over the long term, it is far better for parents to come to a mutual agreement concerning child support payments following their divorce.  Although the state child support guidelines apply in a mediated divorce, parents can agree to deviate from the guidelines if doing so is ultimately in the best interest of the child.  When the support system is built through mutual understanding and cooperation, both parents are invested in the outcome because they were both a part of putting it together.

Mediating the issue of child support in a divorce helps to keep the focus on the best interests of the children, rather than ulterior financial motives. When the focus stays on the welfare of the children involved, they are the ones who truly benefit from the financial support, which is the real goal of the process.

Because mediation rewards creativity, child support can often incorporate “outside the box” concepts. For example, some families will adjust weekly child support in consideration of equal cost sharing for expenses like health insurance or child care. Other parents may choose to pool their income – sometimes with the higher-earning spouse contributing a greater share – to apply to children’s expenses. Perhaps a non-custodial parent will make a direct payment towards a child’s housing costs – or back-to-school clothes, the child’s first iPhone or car, or activity budget.

The point is this: The Child Support Guidelines provide a useful tool for generating a standardized child support order for two average parents at various income levels. What the guidelines don’t do, however, is consider the unique needs of the children and parents of a given family. Through mediation, parents can explore ways to stretch their dollars in the way that most benefits their children and the parents themselves.

Child Support After Death

You can’t help it. It’s not that you are wishing evil upon your spouse while you are going through a divorce (okay, so maybe you are!).  But you can’t help wondering every now and then: what would happen if my spouse just died? While that would certainly make your divorce go away, it would also make your ex’s child support payments go away. Because of that, it’s worth paying attention to the ways you can secure child support after death.

While most people assume that their ex will be around to support the kids until they are grown and gone, life doesn’t always work that way.

If something happens, and your ex dies, your kids are going to suffer. Not only will they suffer emotionally, but they also might take a huge financial hit, too.

Your ex will no longer be able to pay child support. S/he will no longer be able to contribute towards the kids’ extracurricular activities or private school tuition. S/he will no longer be around to pay part of the kids’ medical bills. What’s more, if your ex was carrying the kids on his/her medical insurance, that will be gone too.

So who will support your kids after your ex dies?

Answer: You. Just you.

So, what can you do?

How can you make sure that your kids are not left destitute and that your ex somehow provides child support after death?

Plan ahead!

The best time to provide for child support after death is WHILE your divorce is going on. You can secure child support in several ways:

1. You can require your ex to maintain life insurance naming the children as beneficiaries for as long as s/he has an obligation to pay child support or pay for any of their expenses (including college); or
2. You can require your ex to maintain enough money in an irrevocable trust that names the children as beneficiaries for as long as s/he has an obligation to pay child support or pay for any of their expenses (including college); or
3. You can require your ex to maintain the children as beneficiaries of his/her retirement accounts or any other bank account that has enough money to pay child support and of the kids’ expenses (including college);

Of these 3 options, the most practical is usually life insurance.

Most people don’t have hundreds of thousands of dollars that they can put in an irrevocable trust for their kids. If they have money in any other kind of account, nothing will stop them from using that money while they’re alive. Obviously, if they use their retirement account up before they die, there will be nothing left for the kids to get.

Write your divorce documents properly

If you want to use life insurance to secure child support, your divorce decree has to say that. It has to specifically require that your ex maintain life insurance in a certain dollar amount for a certain period of time.

If your divorce judgment doesn’t specifically require your ex to maintain life insurance, then your ex doesn’t have to do so.

It’s also important that you make sure that your ex is required to keep enough child support to cover his/her obligations to your kids. For example, if your ex is required to pay child support, and maintain medical insurance, and pay half of the kids’ medical and educational expenses until they’re 18, then s/he has to have a life insurance policy that’s big enough to pay all of that!

The same thing is true of college expenses. If your divorce judgment requires your ex to contribute to your kids’ college expenses, then his/her life insurance policy should be big enough to make sure that happens.

Make sure your ex actually maintains his/her life insurance policy after your divorce.

It doesn’t matter what your divorce decree says. If your ex never buys a life insurance policy, or if s/he doesn’t pay the premiums on the policy, there will be no death benefit for your kids to get.

Because of that, you would be wise to put a proof requirement in your divorce judgment. You want your judgment to say that your ex has to provide you with proof that his/her life insurance is in effect at least once a year. Or, if you know your ex will never give you that proof, you want to have the right to get proof directly from the life insurance company.

Then (and this is the hard part!) you have to actually look at the proof every year! Remember, no life insurance policy means no support for your kids if your ex dies.

What’s good for the goose … 

If you really want to secure your kids’ financial future, remember that you count too!

Even if you’re not making a lot of money (and especially if you are!) you are providing support for your children. What happens if you die?

Term life insurance is typically not that expensive. As soon as you can afford it, think about getting a policy on your own life as well.

Consider Funding College Accounts Now. 

Not every state requires divorced parents to contribute to their kids’ college education. But anyone can have a provision in his/her divorce judgment imposing that requirement on one or both parents. (That’s not to say that every parent will agree to do that. But, it’s worth a try!)

If your divorce judgment requires you or your ex to contribute to your kids’ college expenses, smart financial planning dictates that you start saving for college sooner rather than later.

Sure, you can have a life insurance policy that secures your kids’ college expenses too. But, with college education costs spiraling ever upwards, it might not be feasible for you or your ex to get a life insurance policy that’s big enough to cover child support, medical insurance, medical bills, extracurricular activities, educational expenses, AND college expenses too!

Plus, your life insurance policy only kicks in if you die. If you’re still around when your kids go to college, what will happen then?

Don’t forget about Social Security. 

In most cases, children are entitled to receive social security benefits if one of their parents dies while they are underage.

Regardless of what your ex did or did not leave to your kids, make sure that you don’t leave money on the table. Collect the benefits that your children are entitled to receive.

10 Things I Believe I Owe My Children After Divorce

In this excellent blog posting, Terry Gaspard writes about things she believes she owes her children because they’ve endured her divorce.

Her research sheds light on the fact that children of divorce who have an absent and/or distant parent must come to terms with this loss and grieve it so that they can heal and have healthy self-esteem, establish trust in partners, and have successful relationships in adulthood.

Ms. Gaspard believes that all individuals are responsible for their own behavior and happiness. However, children of divorce often live for many years in situations where they are exposed to far too much conflict, stress, and loss. They often navigate living in the two worlds of divorced parents; and sometimes adjust to living with stepparents and stepsiblings.

Divorce Is Difficult Enough Without Being Financially Blindsided

This probably comes as no great shock, but divorce can be expensive.

There are attorney’s fees, court costs, child support, alimony, and any number of additional expenses. For the most part, these are all obvious, expected parts of the process.

You likely anticipate these expenditures and more. Still, there are a number of less apparent costs to divorce, things that can seemingly come out of nowhere and financially blindside you.

Ending your marriage can have a huge impact on your financial future and your long-term economic well-being may hang in the balance. In this excellent blog posting, Rosalyn Wallace talks about a few pitfalls to look out for and a few ways to safeguard your interests.