Divorce Financial Considerations with a Special Needs Child

Divorce Financial Considerations with a Special Needs Child by Susan Ingram

{4:18 minutes to read}

In my last blog, I discussed the governmental benefits that are available to a child or young adult with special needs. When I meet with my couples in divorce mediation, I need to first make sure they understand the public benefits their child is entitled to and then also discuss how these benefits relate to the many expenses (some covered by governmental benefits, some not) that arise when parents are raising a special needs child.

There’s no question that a child with a significant disability will need substantial financial support when he or she is young that will very likely carry into adulthood. Raising a special needs child is challenging enough when the parents’ marriage remains intact. The challenges increase exponentially when parents are separating or divorcing.

This is especially true, because the couple needs to understand and provide for the financial implications of their child’s disability, not just at present, but also at a future time when they will no longer be together or married. Additionally, the financial impact on one parent may be greater than the other, which also needs to be discussed and explored.

There are any number of important financial issues that parents with special needs children need to discuss when they’re going through a divorce. Below I’ve highlighted three of the more significant ones.

Child Support

Child support guidelines generally function well for typically-developing children but are often inadequate in providing for the many extra expenses a custodial parent incurs with a special needs child. While some state laws continue the child support obligation beyond the age of majority or emancipation in the case of a special needs child, other states (including New York) do not.

In their settlement agreement, parents may choose to provide a higher level of child support for the custodial parent or extend payment beyond the statutorily required period of time.

To protect the child’s eligibility for government benefits, parents will need to establish a special needs trust into which the child support payments are placed. The trust enables assets to be set aside without disqualifying the child from receiving government benefits.

Spousal Support (also called Spousal Maintenance)

In addition to child support, spousal support may be appropriate for a parent who is the primary caregiver for the child. Frequently, due to his/her responsibilities, the primary caregiver must cut back on work or give up a job entirely, severely limiting that parent’s current and future earning potential.

Spousal support may provide a means to acknowledge the important role of the caregiver and to “compensate” that spouse to some extent for lost earnings.

Guardianship

If a child is not capable of making decisions on his/her own, parents will need to apply for guardianship before the child reaches the age of 18 (the age of majority in most states).

The settlement agreement must include provisions regarding this important issue – for instance, whether the parents will jointly share guardianship and when the proceeding will be commenced.

There are clearly many issues that divorcing parents with a special needs child must discuss and plan for. Ultimately, the parents’ decisions regarding these and all other issues, financial and otherwise, will be reflected in their marital settlement agreement.

For most of these couples, mediation provides the best forum for making well-informed and sound decisions for their family.

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