Archive for the ‘Child Support’ Category

Bill and Jane are divorced. Bill is court ordered to pay Jane child support. Jane makes the private school tuition payments for their son, Johnny, and Bill has to reimburse Jane for half. Bill has to pay for Johnny’s travel baseball and basketball expenses, and Jane has to reimburse Bill for half. Bill carries Johnny on his health insurance at work, and, after Jane pays the first $1200.00 in annual expenses, Bill has to reimburse Jane for half of any additional expenses, such as the braces Johnny is getting put on this year. Jane has Johnny’s phone included on her cellular phone plan, and Bill reimburses her for half of the monthly payment. Bill has already agreed to carry Johnny on his automobile insurance plan when Johnny begins driving, and Jane has to reimburse Bill for half of the expense.

That sounds like a nightmare, doesn’t it?  However, the above scenario is pretty typical. Without more information, a scenario like this can cause more questions than it answers.  When are these payments due? How soon after the expense is paid should the other parent get reimbursed? How will the parent who has to pay know if the expense actually was paid?

For most divorcing couples with children, there is vastly more money changing hands on a regular basis than weekly child support.  Children are expensive, and many of their expenses are not covered by child support alone.  This includes private school, extracurricular activities, and the kinds of items that are technically considered luxuries by a court but are necessities to the teenagers using them: cell phones and car insurance.  Parents can avoid conflict down the road with a carefully written settlement agreement that covers not only ALL of the current expenses related to the children, but other expenses that may not be presently incurred, but which will occur at some point.  Further, your divorce attorney should include not only how much each parent will pay of these expenses, but which parent will advance the costs, which parent will reimburse, and a timeline for doing so.

Back to Bill and Jane.  What should they do to streamline and simplify all the payments?  One suggestion might be for them to have a spreadsheet in Google Docs that they use to list all of the expenses, including dates paid. On the 5th of each month, they can exchange receipts for the previous month and edit their spreadsheet to reflect all payments. By the 15th of the month, to allow for any questions, Bill and Jane can settle up based on who owes the other what.  This way, only one parent is paying the other, one time per month. There are no “stale” bills and receipts, everything is paid, and Bill and Jane get along beautifully because each feels respected and that the other is pulling his/her weight. This means that Johnny is thriving and feels no conflict or tension between his parents, which is better than anything their money could buy.

If you feel like your settlement agreement or court order could use some work to help streamline child-related payments, and/or getting reimbursed feels like a battleground, contact Wanzer Edwards.

Your Initials are Not A.T.M.

September 1st, 2017 by Wanzer Edwards

Parents who have children preparing to graduate from high school may either agree or be ordered to contribute to the child’s *reasonable* expenses for college.  Typical expenses that are divided may include tuition, room and board, mandatory fees (such as technology, course/lab and parking fees), books, travel expenses (such as a vehicle for the child and vehicle insurance), cellular phone expenses, and health insurance.  Further provisions in agreements or court orders may include limitations on how long parents are responsible, such as for four years or when the child obtains an undergraduate degree, whichever first occurs.  Or that the child must attend a public in-state college, such as Indiana University or Purdue.  Or even that the child must maintain a certain grade point average, to keep the child focused and studying.

So what happens if a child decides he wants to transfer to a more expensive school and decides it’s too far to walk to use the campus meal plan?  If both parents agree that this is appropriate, then there is no issue.  However, if parents do not want to chip in for the groceries and the additional cost of the new school, then that is on the student to make up the difference.

What about study abroad programs?  While these may be once in lifetime opportunities and may actually be part of the child’s major, the cost can be substantial.  As such, these are typically not a requirement for graduation and would be more of a “perk” rather than a reasonable expense.  Again, if both parents agree to fund the opportunity, they can, but if the child can achieve his or her degree without the program, it is okay to say no.

What if the child wants to join a fraternity or sorority?  Again, this is not a must on every campus; however, for many schools, if a child moves into Greek housing, this is a cost that replaces their room and board and may in some cases actually be less expensive than paying campus room and board.  The other “hidden” costs may include everything from membership dues and parlor fees, to the costs of specific events and sportswear that the student may elect to purchase, or not.  These fees can be easily pushed to the child and should be seriously considered before the student becomes a pledge.

A carefully worded agreement regarding the child’s college expenses and the parents’ expectations can help head off any potential disagreements before they begin, and help set expectations for the student.  If you don’t already have detailed college expense language in your court order, consider contacting Wanzer Edwards before your child graduates from high school.

Note: the following article drafted by Elisabeth Edwards was posted to the IndyBar Association website in November 2015 and included in the December 2, 2015 issue of the Indiana Lawyer.  

On November 5, 2015, the Indiana Supreme Court issued an Order Amending the Indiana Child Support Guidelines (“Guidelines”).  A redline copy is available at  Any attorney practicing family law should read the revised guidelines in full; however, a brief overview of the major changes is included in this post, as well as some information gleaned from the Family Law Section Fall Open Meeting held on November 17, 2015.  Practitioners should consult the Order showing the redline changes which will take effect on January 1, 2016.

Spousal Maintenance

Prior versions of the Guidelines provided a deduction from income for spousal maintenance paid as a result of a former marriage.  In like manner, alimony or maintenance received from other marriages was also counted as part of weekly gross income.  The Guidelines have been revised to remove the limitation on maintenance only serving as a credit or income if paid or received from a prior or “other” marriage.  Therefore, maintenance will be included as income or a deduction regardless of whether it involves the parties to the child support action or not.

Similarly, the revised Guidelines remove language prohibiting a deduction for support ordered as the result of a second or subsequent marriage.   Therefore, it can now be argued that establishment of a support order in a second marriage may constitute a change in circumstance and modification of support in the first marriage.

Imputation of Income

Prior Guidelines included language that “regular and continuing payments made by a family member, subsequent spouse . . . that reduce the parent’s costs for rent, utilities, or groceries, may be the basis for imputing income.”  The revised Guidelines take this concept one step further and include language providing, “If there were specific living expenses being paid by a parent which are now being regularly and continually paid by that parent’s current spouse or a third party, the assumed expenses may be considered imputed income to the parent receiving the benefit.”

Adjustment of Weekly Gross Income for Subsequent Children

Prior Guidelines included that the subsequent child multiplier should be applied for parents who had a legal duty or court order to support children naturally born or legally adopted subsequent to the existing support order.  The new language provides that the adjustment shall be applied to “weekly gross income of parents who have a legal duty or court order to support children (1) born or legally adopted subsequent to the birthdate(s) of the child(ren) subject of the child support order.”  This avoids a possibly confusing situation where a child is technically born after the child who is the subject of the child support order but perhaps before any child support order goes into effect.

Cost of Health Insurance for Children

The revised Guidelines add additional information as to how to calculate the child’s portion of health insurance costs.  Specifically, the Guidelines provide that “only the amount of the insurance cost attributable to the child(ren) subject of the child support order shall be include, such as the difference between the cost of insuring a single party versus the cost of family coverage.  In circumstances where coverage is applicable to persons other than the child(ren) subject of the child support order, such as other child(ren) and/or a subsequent spouse, the total cost of the insurance premium shall be prorated by the number of persons covered to determine a per person cost.”

Social Security Benefits

The revised Guidelines more clearly provide that benefits received by a custodial parent based upon the custodial parent’s disability are included in the custodial parent’s income for purposes of calculating child support AND are also a credit toward the custodial parent’s child support obligation.

Abatement of Support upon Emancipation of a Child

The revised Guidelines remove language permitting an automatic abatement of support (now revised for emancipation at age 19) upon the emancipation of a child if it is undisputed.  Rather, parents “should seek to modify or terminate a support order when a child(ren) becomes emancipated under Indiana Law.”

Additions to Controlled Expenses

The revised Guidelines include additional language and examples of the “education” expenses which are the responsibility of the parent paying controlled expenses, such as “ordinary costs assessed to all students, such as textbook rental, laboratory fees, and lunches.”  The Guidelines go on to provide that “the cost of participating in elective school activities such as sports, performing arts and clubs” – costs are that not assessed to all students – “as well as related extracurricular activities are ‘optional’ activities” and are designated as “Other Extraordinary Expenses” per the Guidelines.

Health Insurance

The bulk of the changes to the Guidelines occurred in this area, incorporating the Affordable Care Act and eliminating the Health Insurance Premium Worksheet (HIPW).   While they are too numerous to go into further detail here, Family Law practitioners are encouraged to read this section in total to ensure clients’ compliance with these new provisions.

Some of the changes include:

  • Elimination of the “reasonable cost” calculation and new rebuttable presumption that parents have health insurance available at a reasonable cost due to the Affordable Care Act;
  • Language regarding ways that presumption may be rebutted;
  • A requirement that a parent shall provide the court with proof of existing public or private health insurance for the child through any source, and if the child is not covered, then proof of the cost or an exemption certificate; and
  • Language allowing courts to order the parent providing health insurance to show proof of coverage and provide notice of any coverage changes or coverage termination and possible sanctions against a parent who fails to provide insurance as ordered or who fails to notify the other parent of changes in insurance status.

Parents and practitioners should carefully consider the health insurance tax subsidies or tax penalties under the Affordable Care Act when requesting exemptions, as only the parent providing the health insurance is eligible to receive the tax subsidy and exemption.  Further, if a parent is ordered to provide health insurance and fails to do so, yet claims the child as an exemption, they will incur a tax penalty for not providing insurance.  The tax penalty for failing to provide insurance follows the child and the exemption.

Post-Secondary Education Expenses

The Guidelines were revised to move the deadline for filing for post-secondary education payments to prior to the child turning 19 years of age, in line with the revised emancipation date.  Further, additional language is included regarding the factors Courts should consider when determining whether or not to award post-secondary educational expenses, such as each parent’s income, earning ability, financial assets and liabilities.  “If the expected parental contribution is zero under . . . FAFSA” or if “an award of post-secondary educational expenses would impose a substantial financial burden, an award should not be ordered.”  A member of the committee responsible for the changes to the Guidelines indicated that this is a directive that it is preferable for parents to iron out their own agreements rather than bringing them to Court.

Tax Exemptions

Courts are now required to specify in a child support order which parent may claim the child(ren) as dependents for tax purposes, and must include language in child support orders that “a parent may only claim the exemption if the parent has paid at least 95% of their court ordered support for the calendar year in which the exemption is sought by January 31 of the following year. “ The Guideline “recommendations” for Courts to consider to release exemptions are now required to be considered.

Finally, it was provided in the open meeting that these new Guidelines are similar to the revised Indiana Parenting Time Guidelines in that they are not automatically applied to already existing cases involving child support. Parties must opt in by requesting same with the Court after January 1, 2016.