How to ensure child’s financial security in a divorce

In a divorce it is not just the husband and wife who are involved; the children are also involved. Parents have to make sure that their child's future financial security is not compromised. Follow these five steps to ensure that your child is taken care of financially.

• Set up a trust

In case of a mutual consent divorce, a good option is to consider setting up a trust with the child as a beneficiary. This will ensure that the child’s needs are taken care of in case a parent passes away.

• Health insurance

If the husband stops paying the premium of a health insurance plan after divorce, and you have the child’s custody, make sure you purchase a family fl oater plan of at least `5 lakh immediately covering yourself and the child.

• Life insurance

In case the wife is the nominee in a life insurance plan bought by the husband and he wants to stop paying the premium, the partners can decide to make the child the benefi ciary, with the mother as a guardian. If the husband does not agree to this, it is a good idea to buy a life insurance plan immediately with the child as the nominee. You could then include the premium expense in the alimony calculation.

• Calculate correct expenses

To decide the amount needed for the child, consider the dayto-day expenses of bringing up the child, education and medical expenses, and entertainment needs till he turns 18 or starts earning. If you are getting a lump sum, factor in the longterm expenses for child’s higher education and wedding.

• Claim separate child maintenance

Remember, alimony is separate from child support. In case of a contested divorce, make separate calculations for both and ensure you get suffi cient amount for the child’s upbringing.