Lump sum or annuity in lieu of periodic payments

[nickjames]

What is the name of your state? Texas

Suppose a child support obligation is binding on the estate of the father (who just passed away), and there is still $50,000 worth of payments to be made until both children turn 18. What options are available as far as lump sum payments or annuities. What is an appropriate lump sum to ask for (I don't know how to consider the future value of money)? Also, how would an annuity work in this situation. Would the estate have to purchase it? And when would it start paying out? Any guidance will be appreciated.

 

[NC_Dad]

I am not sure, but dead fathers are dont pay child support.

 

[LdiJ]

What is the name of your state? Texas

Suppose a child support obligation is binding on the estate of the father (who just passed away), and there is still $50,000 worth of payments to be made until both children turn 18. What options are available as far as lump sum payments or annuities. What is an appropriate lump sum to ask for (I don't know how to consider the future value of money)? Also, how would an annuity work in this situation. Would the estate have to purchase it? And when would it start paying out? Any guidance will be appreciated.

An estate is normally responsible for child support arrearages, but generally not responsible for ongoing support unless there is something unusual in the agreements/court orders. The children will be eligible for social security survivors benefits, which are intended to replace support.

The children however might be entitled to a portion of the estate as heirs.

However, if the estate really IS obligated, then either a lump sum payment or an annuity would be appropriate. You would need an accountant to figure out the amounts.

 

[critterperson]

I am not sure, but dead fathers are dont pay child support.

Dead fathers don't pay child support anymore, but their estates do....You best bet is to talk to an attorney...I would think that the whole amount would be taken from the estate, and put in a trust with payments made to the custodial parent...But again a lawyer would be your best be unless someone else here has been there before...

 

[nickjames]

Thanks for the advice, I will consult an attorney but I wanted to educate myself on some of the basics. It seems as if the estate does not have 50K, which would be the total amount paid if payments continued monthly. Therefore, if a lump sum was to be paid out now, would it be less than the 50K because of present/future value? If an annuity was to be purchased, who would do that, the executor of the estate or the obligee after she receives the lump sum?

 

[ceara19]

Dead fathers don't pay child support anymore, but their estates do....You best bet is to talk to an attorney...I would think that the whole amount would be taken from the estate, and put in a trust with payments made to the custodial parent...But again a lawyer would be your best be unless someone else here has been there before...

The estate is NOT responsible for future CS payments once a parent dies unless they had a previous court order to that effect. Mom CAN file for SS death benefits.