Establishing a Trust for Child Support
In most cases, when a couple with children obtain a divorce, the non-custodial parent is required to make monthly child support payments to the other. These payments, whether made directly by a parent or garnished from his or her wages, are almost always deposited directly into the recipient’s bank account. However, in some special situations, parents can instead place child support payments into a trust for the child. For help determining whether establishing a trust for your own child is in his or her best interests, please contact our dedicated child support legal team today.
Good Fortune Trusts
In 1998, Florida began allowing divorcing parents to create what are referred to as good fortune trusts. These types of trusts are similar to savings accounts and are made up of the difference between the amount of child support that would be due under normal guidelines based on a family’s income and the actual cost of a child’s day-to-day needs. When the amount that a parent must pay greatly exceeds the day-to-day costs of caring for a child, courts are often willing to create a trust where the excess funds will be placed. Once the child comes of age, he or she will then be given access to the funds to pay for college or other living expenses. These trusts ensure that child support awards, in cases that involve upper income families, more closely mimic the funds that the parents would have expended on a child if they had not decided to divorce.
Special Needs Trusts
When a child suffers from a mental or physical impairment and his or her parents later become divorced, it is a common practice for the parents to create a special needs trust where all child support payments will be directly deposited. These funds can then be used by the child when he or she reaches the age of majority to pay for rent, medical bills, household expenses, and to supplement income.
Families who fail to take this step during the divorce process and who seek government benefits, will have all child support payments that they receive count towards income. This means that families could end up being barred from collecting state and federal disability benefits despite the fact that their actual income falls below the federal government’s threshold. Furthermore, once a child comes of age, he or she can begin depositing additional funds into the same trust, which can also be used towards their own support, while still remaining eligible for Social Security or Medicaid benefits.
Contact an Experienced Fort Lauderdale Child Support Attorney
If you and your spouse have decided to file for divorce and you have questions or concerns about establishing a trust where future child support payments can be deposited, you need the advice of an attorney who can explain the legal repercussions of taking this step. To learn more, please call dedicated Fort Lauderdale child support lawyer Sandra Bonfiglio, P.A. at 954-945-7591. Initial consultations are conducted free of charge, so please don’t hesitate to call or contact us online today.