When parents divorce, alimony ensures that both parents contribute financially to the custody of their children. Child support payments can be negotiated between parents, but the courts intervene when they cannot agree on the right amount. Here’s a breakdown of what child support is used for, who receives it, and what restrictions apply.
Sponsored: You can also work with a financial advisor to prepare your finances to pay child support or to ensure that the support you receive is used to help your child meet eligible expenses.
What is child support?
Alimony ensures that both parents help support their children financially by forcing the ex-spouse who does not have custody to provide financial support. Even if a parent does not want to become personally involved in their children’s lives, they may still be required to contribute to their child’s education expenses. Failure to pay court-ordered child support can result in fines and even jail time.
How is child support determined?
Child support rules vary by state, but the general rule is that the child should be treated relatively the same as if the parents were not divorced. Many states offer calculators or guidelines that help determine child support. For this reason, it’s best to speak with a divorce attorney in your state to determine which rules apply to your situation.
Child support is generally based on a child’s basic needs and each parent’s income. Over time, if a parent’s income changes significantly, either parent can ask the court to increase or decrease child support payments accordingly.
Who receives child support?
In most states, children receive child support until age 18 or until they graduate from high school. Also, if the child goes to college, the parents may be required to continue paying child support until they graduate from college or higher. Child support is paid to the other parent. However, the child support money is the child’s right and the money should be used to cover his or her expenses.
What can child support be used for?
Raising a child can be expensive, and parents have many different costs to bear. Child support is usually used to cover basic needs, health care, childcare, school fees or other expenses. Here are some of the most common expenses for each category:
Basic needs: Food, clothing, housing and transportation.
Health care: Medical, dental and visual insurance. Co-payment and deductibles, braces, over-the-counter medications and hygiene.
Child care: Daycare, before and after school daycare and summer camps.
Tuition: Children may attend a private school for religious or educational reasons. Some states also require child support to help cover the cost of attending college or graduate school through tuition payments or 529 plans.
Other expenses: Extracurricular activities, tutoring, uniform or instrument costs and extraordinary health costs.
Are there any restrictions on how you can spend child support?
Generally, the receiving parent is not required to keep track of how they spend child support payments. Once the money is received, it is usually mixed with other funds in their bank accounts. For this reason, it is almost impossible to distinguish which money is used for which expenses.
However, if the paying parent can determine that the needs of the child are being neglected while the receiving parent is spending the money on themselves, they could appeal to the court. The court will not get involved in small disagreements. But, they will investigate if it is obvious that the child’s needs are not being met. In these situations, the court may require the receiving parent to document how the money is spent to care for the child.
Child support is a legal obligation to support the needs of a child when the parents divorce. These payments must generally be made until the child turns 18 or graduates from high school. However, they can continue their college studies. The money must be spent on the needs of the child, but it is generally not necessary to document how the money is used. Consult your financial advisor and attorney on how to approach your financial obligations if you are going through a divorce.
Family Financial Planning Tips
Working with a financial planner can help you meet your financial obligations to your children, while saving for your own future. You can discuss your goals with your financial advisor to determine the best strategy for your situation. If you don’t have one, finding an advisor doesn’t have to be difficult. SmartAsset’s free tool connects you with up to three financial advisors who serve your area, and you can interview your matching advisors for free to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, start now.
When you have children, there are many ways to take care of your children financially, including 529 plans, UTMA accounts, and life insurance. Life insurance provides a lump sum to your heirs when you die to replace your income and cover your expenses. Use our life insurance calculator to determine how much coverage you might need.
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