Securing Child Support with Life Insurance

When a divorce or child custody suit involves a minor child, one parent may be awarded primary custody while the other parent may be required to pay child support. Such a situation typically arises when one parent lives far away from their child’s primary residence, the parent makes significantly higher income than the other parent, or a parent is agreeable to paying child support. Most Court orders involving a minor child include an order for one parent to provide child support as it is for the benefit of the child.

Child support is an obligation that arises from a parent’s legal duty to provide financial support to their minor child. This duty to provide financial support normally terminates when the child reaches the age of majority, which is the age of 18 and has graduated high school.

Unfortunately, sometimes the parent obligated to pay child support might unexpectedly pass away before their child turns 18 and graduates high school. In most states, there are laws set up so that child support obligations do not terminate upon the death of the obligor. This article discusses how to ensure your child receives sufficient financial support following the tragic and unexpected loss of a parent who is obligated to pay child support.

Legal Background for Posthumous Child Support Obligations

Under Texas Family Code § 154.015(b), “if the child support obligor dies before the child support obligation terminates, the remaining unpaid balance of the child support obligation becomes payable on the date the obligor dies.” Therefore, the full value of the child support obligation is due when the parent who was ordered to pay child support dies. Even if child support payments were paid in monthly installments, the remaining balance of that obligation is to be paid in full when the parent obligated to pay support passes away.

The survivability of a child support obligation is different from spousal support obligations, which generally end when either spouse passes away. This difference reflects public policy recognizing the importance that financial support plays in the future of a minor child. If a child support obligation were terminated after the death of a parent, the child’s financial success, home life, and education can be difficult for a single parent.

A deceased parent can satisfy their ongoing child support obligations in many ways. It is important to note the testamentary estate of the deceased parent remains liable to fulfill outstanding child support obligations. One way to fulfill the child support obligation is possibly by a type of inheritance or a trust. Another way to fulfill a child support obligation can be done by probating a parent’s estate and the sale of remaining assets. Unfortunately, sometimes complications such as creditors or an illiquid estate during the administration of the deceased parent can tie up and even undercut the inheritance of their surviving child.

Moreover, a parent obligated to pay child support’s estate may not have enough assets to fulfill the child support obligation. This difficult situation can be avoided by a parent taking out and maintaining a life insurance policy. If a parent who is obligated to pay child support is unwilling to take out a life insurance policy a Court may order the party to obtain and maintain a life insurance policy. Texas Family Code § 154.016(a) states:

“The court may order a child support obligor to obtain and maintain a life insurance policy, including a decreasing term life insurance policy, that will establish an insurance-funded trust or an annuity payable to the obligee for the benefit of the child that will satisfy the support obligation under the child support order in the event of the obligor’s death.”

Therefore, a Court can order a parent to obtain and maintain a life insurance policy to ensure that their child is left with sufficient means of financial support until they turn 18 and graduate high school. It is important to plan ahead in the event the parent obligated to pay child support passes and discuss this with a trusted family law attorney who can help guide you on your options a Judge can order.

A Texas Court will consider the following factors when establishing a duty to maintain life insurance to fulfill a child support obligation:

  • The present value of the monthly child support payments required until the child turns 18 and graduates from high school;
  • The present value of the periodic cost of insurance premiums necessary to benefit the child until they reach the age of 18;
  • Whether a child has special needs or education that may continue into adulthood.

The factors listed above are one of many that can be discussed with you in a consultation with one of our experienced family law attorneys. We can discuss planning for your child’s financial future in the event the parent is obligated to pay child support passes, or we can also discuss what your legal options are when the parent who is obligated to obtain life insurance refuses.

Call Coker, Robb & Cannon, Family Lawyers at (940) 293-2313 or contact us onlineto consult with one of our dedicated family law attorneys to explore your rights regarding child support and life insurance or annuities.

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