The law has historically struggled with the fact that minor children continue to need financial support after their non-custodial parents die. Methods for dealing with the problem vary from state to state and legislation frequently changes as lawmakers try to come up with solutions, some of them imperfect.
Termination of Obligation
In some states, such as North Carolina, a parent’s legal obligation to pay child support terminates as of the date of his death. If he leaves children behind for whom he’s been paying support, their standard of living immediately drops because they must now live on the income provided by just one parent. Other states have recognized the inequity of this arrangement and have updated their laws accordingly. For example, Texas changed its legislative code in 2007 to ensure that support continues after the non-custodial parent’s death.
Among states that require payment of child support beyond the non-custodial parent’s death, most mandate that his estate pay the obligation in a lump sum. The parent is no longer living to earn income so there are few other options. Calculation involves determining the cutoff date for support -- either by state law or according to the terms of a divorce decree -- then ascertaining the years of support remaining based on the age of the child. For example, if your decree states that your ex will pay support for your child until she turns 18, and if she is six years old when your ex dies, your ex’s estate is responsible for paying 12 years’ worth of support, or 144 months. If the support order is $800 a month, this works out to $115,200.
Problems With Lump Sum Payments
A child-support obligation has priority over your ex’s other debts so the executor of his estate must pay it first. However, if the estate’s value is less than the lump sum due, your child won’t receive the entirety of the support owed to him. If your ex’s estate is insolvent, with no assets or value, child support ends. If the lump sum support obligation wipes out all your ex’s estate assets, his current spouse and any children from that relationship would receive nothing because there would be no assets left over for them to inherit.
Support From Other Sources
Some family courts require life insurance provisions in decrees to safeguard children against losing a parent's financial support upon his death. In most states, parents usually have this option anyway -- they can use it to avoid their estate being wiped out by a large court-ordered lump sum support obligation. The life insurance policy is usually in an amount sufficient to cover a lump sum payment. Parents can adjust the policy downward each year to keep pace with a smaller and smaller obligation as the child ages and approaches the birthday of the support cutoff date. If the policy is insufficient to cover the lump sum payment due at death, the estate would be responsible for paying the difference. If your child receives Social Security payments after your ex’s death, these are also usually deductible from his estate’s obligation for a lump sum payment.
Most states treat child support like any other debt of the estate, with the exception of giving it priority over all other creditors. If your ex dies, you must make a creditor’s claim against his estate for the money owed. If he was behind in his payments at the time of his death, you can also make a claim for those arrearages. Life insurance proceeds bypass your ex’s estate as long as he did not name his estate as the beneficiary. These proceeds would be payable directly to you or your child so you would not have to make a claim against your ex’s estate unless the policy was insufficient to cover the lump sum debt owed.