Coping With Divorce When You Have Children

Coping With Divorce When You Have Children

October 23, 2020

Coping With Divorce When You Have Children

Navigating a difficult change in your life situation and home environment is never easy. When there are children involved, it can be particularly tricky. In this post I'll do my best to stay away from the emotional components of walking through a divorce with children, and focus instead on the financial obligations you should consider as you work your way through the divorce, including through the property division, alimony, and child support process. Keep in mind, this does not constitute legal advice. I am simply sharing my own experience from my own divorce and those of my clients over the years.

Financial Obligations of Children

Raising children is one of life's greatest joys. Every single day I'm incredibly grateful for my beautiful little boys who are 4, 6 and 8. When my divorce started my boys were 1, 3, and 5 and two were in daycare, and one just starting elementary school. When all three were in daycare, we paid between $24,000 and $25,000 a year in childcare. Even if you divide that by two, $1,000 a month is a large obligation and that's before you have even given them a place to live, own a vehicle to drive them in, feed them, clothe them, and put them in activities. I think it's important to highlight all the financial obligations you need to consider. As you work through the divorce consider:

  • Who will carry health insurance for your children? 
  • How will medical bills be divided after insurance pays their portion? 
  • Who will handle dental insurance and life insurance for the children? 
  • How will beneficiaries on the children’s life insurance be set up and will one parent pay and be the sole beneficiary?
  • When the children decide to get into activities, if they are not already, how will expenses related to those activities be split? 

Some states have a statutory formula that helps you break down how expenses for the children will be paid, and a formula for how child support is calculated. Check with your attorney to make sure that you understand the specific laws for your state and as they relate to your situation. 

Questions for You and Your Co-Parent to Consider

In addition to financial obligations, you and your soon-to-be ex-spouse need to decide individually how you want to handle expenses related to the children.

  1. What is important to you related to your children? 
  2. Do you want to help with cars, do you want help with college, do you want to help with weddings? 
  3. Have you and your soon to be ex-spouse discussed regular set expenses and your obligations? 
  4. How often will child support be re-evaluated? How often can it be re-evaluated based on your state? 
  5. How will you and your ex-spouse track expenses and reimburse one another? 

Should You Have Life Insurance on Your Ex-Spouse?

You can be financially impacted with raising the children on your own if he or she is no longer in the picture. How much life insurance on your ex-spouse is enough if you decide to go down that road? The answer is, it depends. 

  • How many years do you have until the children are out of the house? 
  • What financial obligations are on your plate now, or would be on your plate, if your ex-spouse was no longer here? 
  • Are you self-employed and buy health insurance through the marketplace? If so, the cost of your private health insurance for you and your children would be significantly larger than if the children were previously on your ex-spouse’s employer-provided group health insurance.

Divorce and Children: Navigating the Financial Concerns 

As you work through your divorce, I would encourage you to not only think about the property division from the “what's theirs and mine” perspective, but think about your financial picture as a whole. If you have children you are raising, make sure you have considered the financial obligations related to raising the children. Make sure you consider also the potential of being on your own to raise them if something were to happen to your ex-spouse. 

 

This is meant for educational purposes only.  It should not be considered investment advice, nor does it constitute a recommendation to take a particular course of action. Please consult with a financial professional regarding your personal situation prior to making any financial related decisions.  (10/20)