The costs of raising a child are uncertain. Even the most forward-thinking parent can be unprepared for unusual and unplanned expenses. The unknown financial factors of child rearing often become a sore point when parents divorce, which is why many legal experts recommend custom agreements for child support.
Divorced parents dispute who pays for items that extend beyond daily living costs and regular child support. Experts recommend that parents work out the details early to avoid having a showdown over the future expenses, like who would pay if a child is diagnosed with a long-term medical problem.
A laundry list of childcare expenses might include expected bills for dental work, a child’s extracurricular activities or college education. In between those possible needs are others that attorneys say parents should consider carefully. A 2 year old is more likely to need day care than summer camp. An 8 year old may want to join a sports league. A few years later, a car might be a priority.
Another questionable expense is who will foot the bill for a first car and insurance? What if a high school graduate hopes to enter a private college rather than a less-expensive state school? Which parent will pay for college applications, travel expenses and major birthday celebrations or other life events? What happens if one parent remarries and step siblings enter the picture? How will that affect the inheritance of the first child?
Advisers say there is no way to guess every expense that comes with parenthood. To roll with childhood changes, parents can agree to regularly review and modify financial arrangements.
Parents who discuss and agree upon financial possibilities for children at divorce have less to argue about, if and when the bills surface later. A strategic child-rearing plan saves ex-spouses from future conflicts and court actions.
Source: CNBC, “How to Provide for the Kids Post-Divorce,” Elizabeth Alterman, May 7, 2012