Creative Financial Co-Parenting, Part 1

by Jun 21, 2019

Parenting children after a divorce can be super tricky. There are many things to consider, such as parenting time schedules, transitions between homes, disciplinary responsibility, emergency preparedness, one or both parents re-coupling, and more.

One of the more challenging aspects of co-parenting can be managing finances as it pertains to child-related expenses. While child support is addressed in all divorce cases involving children, there is sometimes confusion and ambiguity as to what child support covers. In this three-part blog, we’ll review several options for financial co-parenting.

Using a Joint Account

For co-parents who are amicable (or close to), use of a joint account can be a great solution for financial co-parenting. Here’s how it works:

  • A joint account is established with both parents’ names on the account.
  • The parents agree on what expenses can be submitted to the joint account, how much each parent will contribute to the account and at what frequency, and special spending rules (such as purchases above a set dollar amount).
  • Both parents establish their own login for the account and agree that each will monitor the account on an established frequency to ensure an adequate balance remains in the account.
  • Both parents have checks and a debit card to access the funds in the account and agree who will pay for replacement card fees and additional checks (either the joint account pays, or each parent pays for their own).
  • The parents determine whose address will be listed as the account’s primary address.

A Case Study

George and Katrina have established a joint account for child-related expenses.  George currently pays Katrina $400 per month in child support.  George and Katrina each contribute $100 bi-weekly to their joint account as their incomes are nearly the same.  The parties agree the following expenses being taken from the joint account:

  • Uninsured healthcare expenses
  • School lunches
  • Kids’ cell phone plans
  • Mandatory school-related fees
  • Extra-curricular activities, lessons, camps, etc., but only if both parents agree to the activity and expense

Any other expense requires email or text notification and mutual consent.  And, ANY one-time expense over $100 also requires email or text notification and mutual consent. George and Katrina agree to pay for their own checks and debit card replacement fees, if accrued.  They each monitor the account on a weekly basis and notify the other if the balance is reaching the minimum required.

George and Katrina agreed to have electronic statements emailed to both.  If mail is sent from the bank it goes to Katrina’s address and she will hand off anything to George that is addressed to him.

Make It Work

The key to joint accounts working is all in the PRECISION OF YOUR AGREEMENT. I had a client tell me that his joint account arrangement with his ex-wife fell apart because they didn’t agree on how check orders would be paid. He paid for his own checks; and when she later needed checks she charged the joint account. Seriously – an $8 charge to the joint account for checks, and the disagreement that followed, was enough to blow up the entire joint account agreement! (There was a great deal of financial distrust between the two, so it didn’t take much.)

One downside to consider with a joint account is the ongoing enmeshment. If one party is still holding on to hope for reconciliation, or has a strong need for control, a joint account can be an excellent tool to increase communication needs and/or increase the use of manipulative tactics. And for some, the need to be completely DIVORCED and not be viewed as “DIVARRIED” will take a joint account arrangement off the table.

Stay tuned for Part II of Creative Financial Co-Parenting, coming next week! And remember – we’re here to help! We want to help you be the best co-parents possible with Divorce Done Differently! Give us a call at 1-877-552-4017 to learn more.



Smarter Divorce Solutions

Certified Divorce Financial Analysts (CDFA®) who keep the cost of divorce low, while being committed to a kinder, gentler divorce process for all involved.

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