Albuquerque Divorce Lawyer Blog

In New Mexico, both parents are legally required to provide financial support for their children. When child support is ordered as part of a divorce or child custody dispute, one parent is typically required to make child support payments until their child turns eighteen (18), or until they are nineteen (19) if the child is still in high school. Depending on the timing of the child support order, parents can be paying child support for a very long time.

Given the substantial financial implications of a child support obligation, to both parents and their children, some parents choose to obtain life insurance policies that will pay their support obligation

style in the unfortunate even that a parent dies before their child turns eighteen (18). In some cases, the court may actually order a parent to obtain a life insurance policy and to maintain that policy until their child support obligation is completely satisfied.

Life insurance policies are available from a number of different places. Some employers offer life insurance to employees as a standard benefit. An employer-provided life insurance plan may not be sufficient to cover a child support obligation because they tend to have fairly low policy limits. However, employer-provided plans typically allow employees purchase additional coverage through the group plan. The major benefit of purchasing through a group plan is that it may not require completion of a medical examination, provided that the coverage stays under a certain amount.

Parents may also apply to purchase an individual life insurance policy directly from an insurance company. Insurance companies provide full life and term life insurance, and will offer significantly varied amounts of coverage. The insurance company will require a physical examination with a doctor or nurse, so that they can assess the health of the applicant. Any health conditions, along with smoking, will increase the cost of life insurance. Additionally, the cost of life insurance will vary depending upon the age and lifestyle of the insured person.

Once they have obtained life insurance coverage, parents may have several options for choosing the policy's beneficiary. The simple, direct approach is to name the child as the beneficiary of the life insurance policy. The problem with this approach is that it may provide a large lump sum to a child under the age of eighteen (18). Generally, a guardian will need to be appointed to administer the funds on behalf of the child. Then at age eighteen (18), the account must be given to the child outright. In the alternative, a trust fund could be set up and a trustee appointed to administer the life insurance funds. Or, the parent obtaining the life insurance policy may name the other parent as the beneficiary of the policy, which means that any proceeds would go directly to the other parent.

Given how unpredictable life can be, parents should carefully consider the options available for securing child support obligations. Life insurance can be expensive, but can provide both parents with an invaluable level of peace of mind knowing that their child will always be supported. Consulting with an experienced family law attorney is essential in any child support action so that parents on either side can understand their options for securing a child support obligation with a life insurance policy.

Related Reading:
Loss of Income and New Mexico Child Support
The Dangers of Not Documenting Child Support Payments
New Mexico Child Support Enforcement: CSED Enforcement/ Collection Methods

Collins & Collins, P.C.
Albuquerque Attorneys

Divorce usually has adverse effects on a person's financial situation--particularly in the short term. However, there are ways in which divorcing individuals can bounce back financially after divorce. The advice applies to all those who face financial hardship after divorce, both men and women.

Get involved in your investments, retirement planning, and insurance.

Many couples tend to split the financial decision-making. While one partner, usually the chief wage earner, focuses on investing and major financial decision-making, the other partner focuses on day-to-day budgeting and bills. After a divorce, it is usually the spouse who did not focus on the bigger picture who suffers most financially.

Establish personal credit and check your credit report for inconsistencies.

Many couples have a single joint bank account and credit card. In these situations, one spouse is usually not building up a personal credit history. Being an authorized user of a spouse's credit card does not build personal credit. Upon divorce, the spouse with no credit history will find it difficult to secure credit in their name.

Another common problem faced after divorce has to do with debt and their credit report. Since New Mexico is a community property state, debt, like assets, is divided equally during a divorce. It is important for individuals to check their credit report to ensure that their debt has been divided and allocated correctly by creditors, in accordance with the divorce settlement. It is extremely important to check for and rectify these mistakes as soon as possible.

Determine a budget.

Budgeting becomes of vital importance after a divorce. Both partners have to be realistic and consider multiple issues when organizing a budget. First of all, both partners have to have reasonable expectations. In most cases, the cost of maintaining two separate homes will prohibit both partners from maintaining their former standard of living.

In planning a budget, divorcing individuals should make a detailed inventory of their income, including income from work, alimony, investments, and child support. However, it is important to account for child support, and possibly alimony, ending at a certain point in the future. There should also be a detailed list of annual expenses, including rent, mortgages, insurance, car payments, taxes, utility bills, food costs, etc. If thinking about returning to school or pursuing some sort of career enrichment, it is necessary that individuals also factor this transition period into their budget. This includes accounting for an income reduction while in school and an income increase when the training is completed.

Children are an important consideration when making realistic budgeting choices. In some cases, the custodial parent wishes to keep the family home. However, this may not make financial sense. It is usually the primary caregiver who fights to keep the children as well as the family home. It is important not to make the decision to own the family home an emotional one, because it may be financially unrealistic.

Save for retirement.

Many individuals find themselves having to begin saving and planning for retirement from scratch after divorce. For various reasons during marriage, one or both partners may neglect to plan or save for retirement. But no matter how late or how difficult, retirement planning must be addressed as soon as possible. It may be best to start investing or saving even a small amount every month which can accumulate with time or, if possible, to take a lump sum received as part of the divorce settlement to begin a retirement fund.

Separate completely.

Finally, many divorced couples neglect to separate their financial lives completely. As soon as the divorce is final, each spouse should ensure that assets are transferred to their name, as well as home and auto insurance policies. Individuals should also make sure that if they receive child and spousal support, then the paying partner has life insurance that will allow for a continuance of the support if they should die unexpectedly. It is also important to change beneficiary designations and to update wills and healthcare directives after divorce.

Even though divorce can be financially crippling, there are ways to get your financial life back on track. It is important, however, to get involved in your finances, be realistic, and make important changes that look toward the future. And if divorce is on the horizon, consult with an experienced divorce attorney early on to protect your financial interests.

Collins & Collins, P.C.
Albuquerque Attorneys

As our Baby Boomers age, we've seen a growing trend in divorce among people over the age of fifty. Of these divorces, a significant number of them occur after one of the spouses experiences a major health scare or disability. There is no single reason why this happens, but there can be many factors involved on both sides of the issue and it is important for attorneys not to judge the motivations of their clients during such a sensitive time.

Surprisingly, many women file for divorce after a major diagnosis or illness. Sometimes, dealing with one's own mortality makes a person seriously consider her life and may encourage her to leave an unhappy marriage that she may have been willing to tolerate previously. These women may want to make the most of the time they have left and have a greater appreciation for that time. In other cases, these women may have undergone a major world view change that gives them different views and perspectives on life that may not be shared with her spouse. This can enhance existing rifts in the relationship.

On the other side of the coin, the spouse of a person who has gone through a health crisis may also feel the need to leave the relationship. Some people are not by nature good caregivers and watching their formerly health spouse struggle with basic functions and tasks may shake their view of their mortality and the relationship. This may cause deep conflicts for a person who is still engaged in vigorous levels of activity himself. Others may go through their own shift in their world view and may no longer share fundamental perspectives with their spouse.

In still other cases, divorce may occur simply because the couple cannot handle enormous health expenses without impoverishing the healthy spouse. Especially in cases where an illness could be terminal, divorce coupled with applications for Medicaid and/or Medicare benefits may be the only option to protect the surviving spouse financially due to the community property laws of New Mexico. If this is something you are considering, you need to consult with an attorney experienced in both these types of estate planning and family law issues before every filing an application for benefits.

Regardless of the reason, serious illness and disability can shake a marriage to its foundations. If you are in this situation, you should consult with an experienced family law attorney to discuss your options.

Collins & Collins, P.C.
Albuquerque Attorneys

The divorce process is a time of stress, disruption and change. With the multitude of decisions that must be made, estate plans, insurance instruments and retirement accounts created during the marriage can get overlooked. As such, ex-spouses can unwittingly remain as recipients or beneficiaries of estate assets, even when it is not intended. They can also be deemed decision-makers in certain inopportune situations.

Prior to any thought of divorce, spouses are commonly named as beneficiaries for estate assets. Because New Mexico is a community property state, each spouse owns 50% interest in the assets acquired during the marriage upon divorce. Each spouse then has the right to say how their 50% is used, including to whom they will leave their separate assets upon death.

Beneficiary designations are often overlooked during a divorce. It may be only during probate proceedings that an ex-spouse is found recorded as an estate beneficiary. This creates obvious problems for the deceased's intended recipients. Likewise, there are difficulties when an ex-spouse is left as a beneficiary on a life insurance policy, pension plan, annuity or trust account.

Worse still is a situation where a person has been incapacitated due to injury or illness and they neglected to remove their ex-spouse as the agent on their living will or advance health-care directive. These are documents that give another party the legal ability to make medical decisions, including the refusal of treatment. If the person is incapacitated, transferring that decision-making authority can be quite difficult.

Particularly after a contentious divorce, one need only imagine the unintended consequences of neglecting to change beneficiary designations. An experienced divorce attorney can help address these issues to avoid the consequences of unintended beneficiaries.

Collins & Collins, P.C.
Albuquerque Attorneys

In New Mexico, parents are held financially responsible for providing for the care of their children's needs. As such, the issue of child support is governed by mandatory state guidelines under the New Mexico Child Support Guidelines These guidelines include a formula based on a number of factors that help ensure children involved in either paternity or divorce proceedings receive the proper financial support.

Each parent is required to report their gross monthly income using a child support worksheet that can be found in the family law section of New Mexico Courts website. This worksheet is generally non-negotiable and most judges will not issue an Order Adjudicating Parentage/Order Establishing Paternity or Final Decree of Divorce without it.

After reporting gross income, credits are given to each parent for certain allowable expenses. Allowable expenses are restricted in nature, typically only covering childcare expenses and healthcare premiums, including medical, dental and vision care. In order for childcare to be considered allowable, the expense must be incurred during time that a parent is either working or is out looking for a job.

Extraordinary expenses related to mental or physical health care that are over $100 and uninsured are also allowed. This would involve things like counseling sessions or orthodontics. These types of expenses would be converted to monthly figures or handled outside the worksheet in the Parenting Plan or other Court Order.

The New Mexico Child Support Guidelines also provide credits for extraordinary educational expenses, as well as communication and transportation costs related to long distance time sharing or visitation. However, these items are typically addressed in a parenting plan, not the child support worksheet.

Likewise, additional expenses, which are not the same as allowable expenses, are not directly considered on the worksheet, nor are they defined by statute. However, these too may be addressed in a Parenting Plan or other Order outside the child support worksheet.

Keep in mind, the child custody and/or time-sharing arrangement will determine which New Mexico Child Support Worksheet to use. Worksheet A is used when one party has primary custody. Worksheet B is used when there is shared custody.

Once the parties determine the appropriate worksheet to use, all allowable expenses are entered into the worksheet along with gross income figures for both parties, and when appropriate time-sharing ratios. From these statutory entries of income, expense and time-sharing, the monthly child support figure will be determined. Unless there is a very good reason to deviate which there seldom is, this is the child support!

Collins & Collins, P.C.
Albuquerque Attorneys

When New Mexico parents divorce or separate and a court action is filed regarding child custody, one of the final documents (also called pleadings) filed with the court is called a Parenting Plan. The Parenting Plan provides details about legal custody for the child, as well as physical custody or timesharing. It should also include a child support worksheet and should address which parent will pay the ongoing cost of health insurance for the children.

New Mexico law imposes a duty on both parents to support their children and part of that support is providing health insurance coverage for their children when it is available. The New Mexico Child Support Guidelines are used to calculate child support and require that a parent providing health insurance coverage for the children be given credit for the monthly insurance premiums paid.

Other issues regarding health insurance for the children may arise if neither parent has affordable insurance available to them through work, or when an insurance plan is refusing to cover children when they do not live with the insured parent full-time. These issues may need to be addressed by the court. However, no matter how the final decision as to ongoing health insurance for the children is reached, the Parenting Plan should clearly identify which parent is paying and provide for an exchange of information regarding coverage. An experienced divorce and family law attorney can ensure that the health insurance issue is properly addressed by the court and included in the Parenting Plan.

Collins & Collins, P.C.
Albuquerque Attorneys

In New Mexico, one of the final documents (also called pleadings) filed with the court to complete a divorce is called a Marital Settlement Agreement, or MSA for short. An MSA should provide details as to the final division of the parties' property and debt, which may be the result of a settlement agreement between the parties or the order of the court.

The MSA does more than just assign debts and assets to the parties, it may also provide instructions as to how those debts and assets will be exchanged and protected. Health insurance is one asset to a marriage that may be addressed in an MSA. Generally, if one party to the divorce is providing health insurance for the family pursuant to his or her employment, he or she is not obligated to continue to provide health insurance for their former spouse, although they may be required to continue to provide coverage for their children. In fact,many insurance carriers will not allow continuation of coverage on the same policy for an former spouse.

However, some health insurance policies may allow the divorcing spouse to remain covered as long as they begin paying their own insurance premiums after the divorce. Also, parties can agree that one spouse will continue to pay the health insurance premiums for the divorcing spouse as a form of spousal support. The issue of health insurance coverage after a divorce is complicated because the coverage available will often depend on the terms of the policy in place at the time of the divorce and those terms can vary widely from policy to policy.

Parties to a divorce should consult an experienced divorce attorney who can counsel them as to the law regarding health insurance and can conduct proper discovery in order to explore the terms of the parties' policy. An attorney should also ensure that whatever agreement is reached regarding ongoing health insurance for the parties is properly included in the MSA.

Collins & Collins, P.C.
Albuquerque Attorneys

Given the rising cost of health care, a major concern for couples involved in a divorce is the question of continuing health insurance coverage during and after a divorce.

In New Mexico, when a petition for dissolution of marriage is filed, which begins the divorce process, the courts generally enter a Temporary Domestic Order ("TDO"). The TDO binds both parties and prohibits them from making major changes to the parties' financial status and prevents both parties from cancelling insurance coverage for their spouse or children.

Although the TDO requires that health insurance coverage be maintained while a divorce is pending, after the divorce is complete the district courts generally do not have jurisdiction to require that one spouse continue to provide insurance coverage for the other. Further, most insurance companies that provide coverage to employee's spouses will not allow that coverage to continue after a divorce and the district courts cannot force those companies to do so. Occasionally, a health insurance company will allow continued coverage after parties obtain a legal separation, which is one reason why some people seek legal separation rather than a divorce.

In contrast, the New Mexico child support guidelines require parents to provide health insurance coverage to their children after a divorce, if health insurance is available to the parents. However, which parent is required to provide the coverage can depend on a variety of factors including the cost to each parent.

Anyone involved in a divorce in which a party has cancelled health insurance coverage in violation of the TDO should immediately consult an an experienced divorce attorney about how to enforce the TDO. Similarly, anyone in involved in a child support dispute should consult an attorney to discuss their rights and responsibilities with respect to health insurance coverage for their children.

Collins & Collins, P.C.
Albuquerque Attorneys