Dividing assets is often one of the most important and complicated parts of negotiating a divorce agreement. At the same time, couples who are parents need to create a parenting plan that outlines each parent’s respective rights, duties, financial obligations, visitation schedules, custody and decision-making roles, strategies for resolving disputes that arise, and other key matters related to raising the children.
The funding involves child support and perhaps spousal maintenance, but understanding the financial details of creating a fiscally-practical arrangement can be confusing. Below are some important economic issues to consider when searching for solutions:
- Taxes
The custodial parent is the default for claiming dependents on taxes, but it may be possible and make better financial sense for the other spouse to claim them if it provides a more impactful tax credit. Other claims may include dependent and childcare expenses credit, health coverage tax credits, dependent care exclusion benefits, and earned income credits.
- An emergency fund
The couple may have had an emergency fund when they were married. It still makes sense for divorced families to have one if there is a family emergency. A car breaking down, a pipe bursting in the home, or another significant unexpected expense can hamper a parent’s ability to provide for their children.
- Healthcare costs
One spouse may have a more comprehensive family health insurance plan through their job. Other factors include whether the children have a preferred doctor or healthcare facility and which insurance carrier provides better out-of-network care.
- Financial aid for college
The Free Application for Federal Student Aid form only considers the custodial parent’s assets and income, so it may make sense to have a college-bound teen change households before their senior year in high school to get a better financial aid package.
- Estate planning
Divorce typically calls for modifications to a current estate plane, but it can also be the impetus for creating one. If one parent dies, the parents should work out custody and who cares for the children if they are minors. It could also list who could be a legal guardian, such as a grandparent or trusted friend, in the event that both parents are deceased.
All family’s finances are different
An experienced, Board-Certified Texas Family Law expert attorney can help create a smart and forwarding-thinking financial settlement that helps put the client and their children on firm financial footing after the final divorce.