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.