Which statement describes a technique used to address the issue of ensuring the payment of adequate child support by a noncustodial parent when the parents of minor children are divorced? A) A provision in the noncustodial parent's will leaving property to the minor will solve this concern. B) To ensure that child support payments are continued if the noncustodial parent dies or becomes disabled before such payments are to cease, the parents must enter into a nuptial agreement. C) An irrevocable trust established and funded by the noncustodial parent to ensure payment of child support can be a valuable tool to protect such assets from the claims of future creditors of the noncustodial parent. D) Insurance on the life of the noncustodial parent must be owned by an irrevocable life insurance trust to prevent the noncustodial parent from changing the beneficiary.
Which statement describes a technique used to address the issue of ensuring the payment of adequate child support by a noncustodial parent when the parents of minor children are divorced? A) A provision in the noncustodial parent's will leaving property to the minor will solve this concern. B) To ensure that child support payments are continued if the noncustodial parent dies or becomes disabled before such payments are to cease, the parents must enter into a nuptial agreement. C) An irrevocable trust established and funded by the noncustodial parent to ensure payment of child support can be a valuable tool to protect such assets from the claims of future creditors of the noncustodial parent. D) Insurance on the life of the noncustodial parent must be owned by an irrevocable life insurance trust to prevent the noncustodial parent from changing the beneficiary.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Which statement describes a technique used to address the issue of ensuring the payment of adequate child support by a noncustodial parent when the parents of minor children are divorced?
A)
A provision in the noncustodial parent's will leaving property to the minor will solve this concern.
B)
To ensure that child support payments are continued if the noncustodial parent dies or becomes disabled before such payments are to cease, the parents must enter into a nuptial agreement.
C)
An irrevocable trust established and funded by the noncustodial parent to ensure payment of child support can be a valuable tool to protect such assets from the claims of future creditors of the noncustodial parent.
D)
Insurance on the life of the noncustodial parent must be owned by an irrevocable life insurance trust to prevent the noncustodial parent from changing the beneficiary.
Expert Solution
Step 1
Establishing an irrevocable trust can ensure that assets are set aside to pay child support, protecting them from creditors or other financial obligations of the noncustodial parent.
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