her during the holidays and summer months. Atiya moved in with her mother, who recently nailed down a position at a radio station in her hometown of Baltimore.
Regardless, if you are a single parent with shared custody or sole custody, “it is important that the right documents are drawn up,” says Mitchell. “You want to make sure that money earmarked for your child goes directly to him or her, especially in situations where there are multiple children from other relationships living in the same household.” It might be better to set up a custodial account under the Uniform Gift to Minors and Uniform Transfer to Minors acts, where the money is held in trust until your child comes of age (18 or 21).
Mitchell adds that you should hold life insurance in a living trust to ensure your child receives death-benefit payments. In general, a trust holds cash, securities, real estate, and other assets that are transferred to a trustee (a person or corporation) on behalf of its beneficiaries. You can change a revocable living trust; you can’t touch an irrevocable one. You can use testamentary trusts to isolate funds for your children from a first marriage. If you are the sole parent raising the child, you need a will that appoints an executor as well as a guardian for young children, otherwise the court will make that decision for you.
There are a lot of different dynamics that come into play when you have children from a divorce. Whoever is the prevailing spouse may get alimony for the health, welfare and maintenance of herself (or himself) and the children. However, child support is earmarked for the children only. Moreover, alimony is tax deductible, child support isn’t.
Recent changes in child-support laws are helping single parents track down elusive spouses who owe thousands in unpaid, but court-ordered, child support. The Office of Child Support Enforcement (OCSE) estimates that 4.4 million parents have skipped out on paying child support. To change that statistic, OCSE has culled two major allies.
Now after a person gets a new job his or her name is automatically input into the National Directory of New Hires, a federal database that enables child-support recovery agencies to locate hiding parents and collect overdue funds. Or depending on your state, the License Revocation Program takes away your ex’s commercial, professional, or driver’s licenses. Your ex will have to arrange to make amends before getting his or her license back.
Reducing taxable income is a key part of estate planning. Owning a home offers significant tax benefits. The federal government provides tax deductions for property taxes and mortgage interest. Roberts refinanced her mortgage to take advantage of lower market rates, 6.2%; she also pays extra on her monthly mortgage payments to build up equity in her home even quicker.
“I really want to get my hands on my first piece of property (a two- or three-family home) this year,” says Hailstock, who is virtually debt-free with about two years left to pay on a car