Tracy Stewart
Tracy Stewart
Hidden Costs of Parenting After Divorce

Raising children is a costly endeavor. Add in the difficulties of co-parenting with an ex-spouse and the costs can go even higher.

September 16, 2010
by Tracy Stewart, CPA, PFS

Most parents will agree that raising children is expensive. For divorcing parents, that may be the only thing they can agree on when it comes to sharing the costs of raising their children. Child-support judgments made on the date of divorce cannot predict the scores of variables that will crop up in a child’s life. Even for parents who are not splitting up, it is impossible to accurately foresee how much it will cost to raise children. For example, select sports teams and their growing costs did not exist 10 or so years ago.

One unhappily divorced Mom’s solution for insufficient child support is perhaps not uncommon, but it is not optimal. “He’ll just have to live with it then. I’ll tell the kids they have to ask Dad every time they want something.”

Making Joint Financial Decisions

Splitting couples would do well to learn how to navigate through the decision processes of post-divorce joint parenting. Who will pay for the special-needs items, birthday parties, private school tuition, college-related expenses, extracurricular activities, latest technological innovation, singing lessons and tattoo removal?

Sam’s parents have been divorced for several years. They have been fighting over child support ever since. As a part of the settlement, Mom and Dad agreed to share the cost and insurance of a car for Sam when he reached driving age.  When Sam got his driver’s license, Dad offered to buy him a BMW. Sam’s friends had BMWs and Dad was proud to be in the financial position to buy his son a BMW.  Dad didn’t ask Mom to pay for half the car, but he did want to stick with their divorce agreement that states that Mom pays for half the car insurance. While Mom had planned on paying for half of Sam’s car insurance, she had not anticipated the higher cost of the insurance premium that comes with a teenaged boy driving a BMW.

Not only is this a financial strain for her, but also an emotional disappointment. Buying her own first car was a fond memory of her teenage years. When she started to drive, her parents spent time with her talking about cars, looking at cars on the weekends, explaining to her the pros and cons of each type of car and ultimately allowing her to make the final decision. This was her first major financial decision in life and she felt it was a big step toward growing up. Mom wanted to be a part of this right of passage experience for Sam. With these financial constraints and emotional concerns, Mom and Dad reached an impasse and Sam’s first car was put on hold, even though the issue had been part of their original agreement.

Third-Party Neutral Mediates Financial Issues

How can parents like Sam’s make mutual-parenting decisions when they can’t even talk to each other? They can hire a Parenting Coordinator to help them resolve their child-related disagreements and avoid numerous trips back to court. The long-term objective is to reduce the conflict associated with their parenting communication and decision-making process.

Parenting Coordination is a child-focused alternative dispute resolution process in which a mediation-trained and experienced mental health or legal professional helps parents resolve parenting disputes. These professionals are required to have extensive practical experience with high conflict or litigating parents. This definition may sound touchy-feely, but in fact it is very effective in resolving concrete financial disputes over children’s expenses. This tool can help parents of moderate means as well as parents of wealth, like billionaire Donald Bren, who has been sued for back child support of $400,000 a month.

According to Houston Parenting Coordinator, Faith Wilson, MA, LPC, “This is not therapy. It is meant to be short term and action packed. We come in, get something done, and move out.” If the parents cannot come to a mutually agreeable resolution, the Parenting Coordinator can act as an arbitrator and make the decision for them. For busy divorced parents, this no nonsense approach is a plus. It is fast, effective and can get the couple to a resolution that works.

It is not uncommon for parents to return to court several times over the course of a child’s minority. This is expensive for the parents in time, legal fees and emotional stress. Through their interaction with the Parenting Coordinator, the parents learn skills for making future joint parenting and financial decisions. This goes a long way towards reducing the chances that the parents will return to court over parenting issues, whether financial, emotional or both.

Parenting Coordinators can be appointed by judges or selected by attorneys. If a couple is already divorced and wants to find a Parenting Coordinator, they should ask a family law attorney for referrals. If a couple is in the middle of a litigated divorce, the judge will appoint one. If the couple is in a collaborative divorce, the Parenting Coordinator is part of the professional team. Parenting after divorce can come with unexpected financial conflict.

Learning how to communicate and make compromises with an ex-spouse can reduce the financial and emotional burden that comes with co-parenting in two separate households.

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Tracy B. Stewart, CPA, PFS, CFP, CDFA specializes in family law litigation support in Houston, Texas. She helps clients protect their wealth during property settlement negotiations. She is a member of the AICPA Personal Financial Planning and the Forensic and Valuation Services sections. Stewart is a board trustee for the Collaborative Law Institute of Texas as well as on the Executive Board of Texas Society of CPAs. You can contact her through www.texasdivorcecpa.com.

The AICPA’s Personal Financial Planning Section is the premier provider of information, tools, advocacy and guidance for CPAs who specialize in providing estate, tax, retirement, risk management and investment planning advice to individuals and closely held entities. The Personal Financial Planning Section is open to all Regular Members, Associate Members and Non-CPA Section Associate Members of the AICPA. If you are a CPA who wants to demonstrate your expertise in this subject matter, become a Personal Financial Specialist Credential holder. Visit www.aicpa.org/PFP to learn more.