3 Post Divorce Facts You Need to Know if You Have Children
When you have children and get divorced, you will have to maintain in contact and remain civil with your ex-spouse. Â If you are thinking about filing for divorce and have children of your own, here are a few facts you may need to know about the continued expenses you never thought about.
1.) Maintaining Life Insurance
In most cases, life insurance is maintained by both parties post-divorce. In regard to the payor spouse, we like to see the payor spouse maintain life insurance in an at least amount sufficient to cover the child’s support payments from the date of divorce to the date the child will be emancipated. There are many other costs that go into what that spouse would be responsible for during that time period, including uninsured medical bills, college tuition, cost expenses and so forth. If I calculate the child support out; depending on the age of the child and the anticipated date of emancipation. It could come to $250,000, then I’d ask for $250,000 life insurance policy. It’s important to check because I don’t see other lawyers checking the term of the policy. You want to make sure that whatever policy they have is going to last until the emancipation of the children. That can also be an employer provided policy, but nobody can guarantee that they’ll be with that employer until the child is emancipated. If the spouse, during a certain time period, when they’re employed by that company, they are going to rely upon their employer provided life insurance policy to meet the requirements of the agreement. It doesn’t have to be just an employer provided policy that the policy has to maintain regardless of whether the person is employed.
With regard to the recipient spouse, their services to the children also have a value. If you have a stay-at-home spouse or stay-at-home parent, you have to think about what it would cost to replace that spouse’s services in the event of a death.  You’ve have to look at anticipated day care cost and other services that person does whether it’s mowing the lawn, cooking meals and then figure out what the actual needs of the children will be. Evaluation of that aspects is little hotter than evaluating the anticipating child support payments. In most cases, what we do is look at what one spouse maintains, then the other spouse has to maintain.
Another factor in life insurance is whether they already have life insurance policies and how long the term is with those life insurance policies and the cost of those policies. If the parties felt that they needed life insurance during the marriage that view wouldn’t change by either the parties or the court because if they needed it during the marriage, then they need it post-divorce as well.
Summary:
- Generally, life insurance is maintained by both parties after the divorce
- The payor spouse would like to be seen maintaining life insurance in an amount sufficient enough to cover child support
- You should check the term of your insurance policy to ensure that it will last until the emancipation of the children
- You need to take into consideration any loss of the recipient spouse’s services, in the event of a death
- Whatever one spouse maintains has to be maintained by the other spouse
2.) Dependency Exemptions
Dependency exemptions for the children are allocated between the parties by the court, and it depends on the relative income of both parties. If there is a situation where one party would be “wasting” the exemption, that means it has no beneficial impact on the amount of taxes that they have to pay; then the other party will typically get the exemption. If both parties benefit from the exemption and there is, for instance, one child; the general rule of thumb is that child’s dependency exemption would get alternated. If there are more than one child or two children, then they would be split, as long as both parents have a need and a use for the dependency exemption. If there are three children, it might get to be two children, one year for one parent, one child for the other parent and then reverse the following year. In any case, an IRS Form, “form 8332” needs to be filled-out to release the dependency exemption to the other parent, and that generally gets filed with the tax return.
Summary:
- Dependency exemptions are allocated by the court, depending on a relative income of the parties
- If both parties benefit from the exemption and there is one child, that child’s dependency exemption would be alternated
- If there are more than two children, exemptions would be split, as long as both parents have use for the dependency
3.) Uninsured Medical Expenses
Uninsured medical bills are discretionary with the judge in terms of the allocation of the payment. Although in the vast majority of cases, it’s split 50-50. If one parent is paying full child support according to the child support guidelines, then that was taken into consideration when the child support guidelines were written, but there would be uninsured medicals bills and they’re split.
One of the biggest problems though with uninsured medical bills is how one party informs the other party of the medical bill. Lots of times, people don’t want to have monthly contact with their former spouse over bills and asking for money. However on the flip side of that, it’s really not fair to present to one spouse a whole year or two worth of bills even if the agreement says 50-50. What my preference in agreements is, whoever incurred the bill on behalf of the child, has to be presented to the other spouse within 30 days of receipt of the bill or payment of the bill. The spouse who’s paying the half bill has to give the other party the funds within 30 days. What that does is prevent a buildup of bills that someone can use to ambush the other party. Also, it’s a method for both parents to stay informed of what the child is doing medically, what appointments they’re having and what the child’s medical needs are.
Summary:
- A family plan premium may be more expensive than individual coverage
- The premium cost is taken into consideration when determining child support
- Generally, you are better off not proving insurance in the calculation because you don’t get the full benefit of the premium amount in the reduced amount of child support, under circumstances that you do not have insurance
Are you ready to go through a divorce, but want to ensure that you cover all your bases? Â Let one of our dedicated Divorce Attorneys in Mansfield guide you through the matter.
