Assuming the parties in a divorce have children under the age of 21 years old, child support will be an issue to be negotiated and resolved, or if not resolve-able, then determined by the Court. At some point in the case, the child support amount to be paid by the “non residential parent” to the “residential custodial parent” will be determined and fixed. However, there needs to be the realization and understanding that it could happen that the paying parent might unfortunately, die, during the period of time that he or she is under the obligation to pay child support. In other words, protections must be put into place during the divorce settlement or trial process to protect the income stream that might be suddenly terminated due to the untimely death of the paying parent. If this is not planned for, then the children will not only suffer emotionally because they have lost a parent, but they will suffer financially. Without any protections and planning in place, the support of the children falls 100% on the shoulders of the residential custodial parent.
What can be done in order to protect the children from the financial crisis that could arise if the parent paying child support would die?
Life insurance is the first line of defense. A calculation should be made to determine how much child support the paying parent would be paying over time from the date of the settlement or trial decision until the children are legally emancipated. This total should then be the minimum amount of term or whole insurance that the paying parent will be required to obtain and maintain, naming the residential custodial parent as the trustee and the children as the “irrevocable beneficiaries” of the death benefit, until the children are emancipated and the paying parent’s child support obligation terminates. Note that if the settlement agreement or trial decision also requires the paying parent to provide a portion or all of the children’s college or other expenses such as medical insurance for example, then these amounts need to be added into the calculation of what the appropriate insurance death benefit should be.
Second, if the paying spouse has financial accounts such as stock portfolios, bank accounts and the like, the children can be designated as “pay on death” beneficiaries. However, it should be noted that the paying spouse would have no restrictions on changing the children’s beneficiary status at any point in time, so this child support protection method may not prove to be a protection at all.
Next, the above financial assets of the paying parent may be placed in an irrevocable trust which designates the children as the irrevocable beneficiaries for as long as the child support and other expenses such as college, is required to be paid.
Life insurance, in your author’s opinion, is the most practical and safe protective solution.
It is very important that it be understood that if the paying parent names the children as beneficiaries in his or her will, leaving adequate funds or even a greater amount than appears necessary to cover child support and all other expenses of the children in the event of that parent’s death, that will can be changed at any time without any notice to the residential custodial parent. In other words, a parent promising to leave assets by will for the children to inherit upon his or her death as a “guarantee” that the child support obligation will be covered in the event of the paying parent’s death is NO guarantee at all!
To better understand how child support and other payments may be protected in Nassau and Suffolk County New York and how your particular facts and circumstances could impact this important issue, you are invited to contact Robert B. Pollack, Esq., principal attorney of The Pollack Law Firm, P.C.
By Robert B. Pollack, Esq., principal attorney at The Pollack Law Firm, P.C.: Our firm is solely focused on Nassau and Suffolk County divorce, separation and all phases of matrimonial law, family law and mediation—
The Pollack Law Firm, P.C., serving clients in Nassau and Suffolk County, is always available to assist and represent parties in divorce and all other matrimonial and family law matters. Please call today to schedule a free consultation: (516) 938-3330.
DISCLAIMER: This article is intended to provide only general information for entertainment purposes and should never be relied upon as legal advice. One should seek the assistance of experienced matrimonial counsel to assist in explaining the law, options and making important decisions in any divorce, matrimonial or any family law matter.