Who Pays for Child Expenses?
Child Support, Divorce
When parties divorce, courts have to address certain specific financial responsibilities of the parties related to the children – child support, who pays for medical and dental insurance, who pays for college. The court will also indicate how to pay for unreimbursed medical or extraordinary expenses. But after that, what about all the other activities in which kids engage, from camps and sports to movies and luxuries?
U.S. News has a very good article on suggestions to deal with these issues as parents. We thought we would add some suggestions to deal with in your divorce decree.
One general problem that brings parties back to court on a motion to modify or motion for contempt has to do with areas not clearly spelled out in the judgment with regard to payments of expenses, so the more thorough and specific parties can be in the judgment, the better the day-to-day handling of these issues.
Parties should begin by writing down for their attorneys all the items they would like addressed in terms of expenses and how they should be decided and shared. What may appear if the lists are compared is that the parties are not on the same page about certain expenses, and those need to be resolved to avoid future conflict and litigation.
What causes most problems?
First, a party paying child support will claim that a certain expense is covered by the monthly child support, and that may or may not be true. The intent of child support is to handle day-to-day monthly expenses relating to the children. However, that does not mean that sports camps are in that category, or even additional books for school. To avoid this confusion, parties can include a definition of child support in their decree and what it covers and a list of items not covered. Further, the parties can agree on how these uncovered expenses would be handled in terms of joint decision making and the share of expense born by each agreed upon expense. Generally, courts rely on income shares, but parties can agree as they wish. But when parties unilaterally make a decision to spend on a child, that could violate the terms of the custody arrangement and in general leads to a bigger issue – one parent perceived as the "giver" and the other parent a non-contributor, which could be very unfair if the parties have real income disparities.
Second, after the parties have set out clear categories, they should agree on a decision making process for approving an expense and how that expense will be shared. In this way, the judgment itself contains all the detail the parties need to resolve expenses related to children that regularly come up in children's lives. Having a decision making process in place is important because it will help minimize unilateral decisions that could affect scheduling and encourages both parents buying in – literally – to the expense. The proportion each party should pay should be fair and reflect both an ability to pay and a show of joint contribution.
Finally, as noted in the article, parents should work together on coordinating activities and expenses, as it minimizes discord, and keep these money matters away from the children as much as possible, though for extravagance children should know something is a luxury and that it should not be taken lightly (even if one parent has the financial ability to spoil a child). Parents should teach their children financial value and responsibility early – it helps the parents as much as the children.
If you have questions about handling child expenses in divorce, contact us – we can help.
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