Child Support in a High Net-Worth Divorce
A parent’s obligation to support his/her child does not end at the courthouse doorstep simply because a divorce is granted. This mandatory responsibility continues until the child becomes an adult, and is subject to court oversight for its establishment, modification, enforcement, and termination. Florida has a formula for calculating the monthly child support amount based upon the income of each parent plus the number of shared children. Other expenses and costs for the child can be added, but this general structure is used to resolve this issue, and it works for the majority of divorcing parents. However, the paradigm typically shifts in a divorce between a high net-worth couple due to the resources of the parent and the needs and expectations of the child. Thus, parents in this situation have additional considerations to factor into resolving the child support, including whether the guidelines should apply, or if a deviation is needed to obtain a fair result. As an example, MLB player Miguel Cabrera was recently ordered to pay $20,000 per month in child support to the mother of two children he fathered during a long-term affair, as well as the children’s private school tuition, health care, day care extra-curricular activities, vacations, and a $5 million life insurance policy. Some of these additional expenses are standard, but others are not typically borne by one parent, which underscores some of the differences high net-worth parents should anticipate with this issue. A discussion of the unique issues high net-worth spouses can encounter over child support will follow below.
Basic Child Support Framework
As noted above, income and the number of children are the core factors that are used to calculate the monthly child support amount. The income used is based upon the gross monthly earnings of each parent, minus certain allowable deductions, such as income tax, child support for other children, alimony from a previous marriage, and health insurance (except that paid for the child). Further, the following expenses can be tacked onto the basic obligation: child care and health insurance for the child. Currently, the chart which outlines the monthly amount tops out at $10,000 per month in combined income. For spouses with income in excess of this amount, an additional percentage is multiplied (starting with five percent for one child and increasing between one and two-and-a-half percent for additional children) by the amount of income above $10,000 to arrive at the final number. As noted above, though, this number may not account for all of the child’s needs or the capacity of a high net-worth client to pay, and a deviation may be requested to account for this difference.
Deviations from the State Formula
Deviations from the standard formula are not automatic and must be specifically requested by a parent before a court will deviate from the statutory amount. Further, any deviation will only be approved if certain circumstances exist, including:
- Extraordinary medical, psychological, educational, or dental expenses;
- Income earned by the child;
- Seasonal variations in a parent’s income;
- The age of the child, with older children having greater needs;
- Special needs, such as a disability;
- The total assets of the payor, payee, and child; and
- Any other reason that is fair to both parties.
In cases with high net-worth parties, a court could choose to increase the monthly amount to maintain the standard of living the child enjoyed before the divorce, or reduce the required amount if it would exceed the child’s needs. Thus, deviations can go in either direction, and should be requested by a parent when necessary to address the unique facts of a family’s situation.
Get Legal Advice
The more complexity a couple brings to a divorce, the more an experienced divorce attorney is needed to protect your interests. High net-worth couples bring a number of complicated issues into a divorce, and are best handled under the guidance of an attorney who can appropriately address these concerns before the court, as well as facilitate private agreements to keep information out of the public sphere. The attorneys at the office of Joyce A. Julian, P.A. know the challenges facing high net-worth couples, and will work to get you the best possible outcome. Contact the Fort Lauderdale family law firm at (954) 467-6656 for a free consultation.