The Impact of Wealth on Child Support Arrangements in Divorce
June 06, 2023
How Can the Wealth of One or Both Parents Impact the Amount of Child Support Paid Following a Tennessee Divorce?
Child support is a complex and emotional topic for many divorcing couples. Most parents have questions regarding how much child support they will receive or be required to pay until their child reaches the age of 18. The financial implications can quickly become confusing for couples ending a relationship where one or both individuals are high-earners. Whether you have many assets or are leaving a marriage where there is a wealth disparity, our experienced Tennessee child support lawyers can help you navigate the state’s child support laws and negotiate an arrangement that is best for your child.
How Are Child Support Payments Determined?
Tennessee has complicated guidelines for calculating each parent’s share of the monthly Basic Child Support Obligation (BCSO) for their minor children. The BCSO is the amount required to cover the essential expenses for raising a child, including food, transportation, housing, entertainment, clothing, and public schooling costs. Extra expenses such as health insurance, daycare fees, or private school costs are considered separately because they can vary significantly from situation to situation and may not apply to all parents.
Every parent must fill out a Child Support Worksheet to begin the process of figuring out the appropriate amount of child support for their circumstances.
The worksheet will collect the following information to aid in the calculation:
- The number of children involved.
- How many parenting days each parent gets with every child.
- The parents’ adjusted gross income (AGI), including the subtraction of credits for specific situations, such as paying self-employment tax or child support for other children.
- Basic expenses for raising the child.
- Additional expenses, such as health insurance, will be used to calculate an Adjusted Support Obligation (ASO) if needed.
- Any deviations from the calculated support amounts agreed upon by the parents.
Using this information and considering the best interests of the child and any other relevant factors, the court can determine the amount owed by each parent in child support. Note that this is a highly simplified summary of the actual calculations. It is recommended that you consult with a knowledgeable child support lawyer before attempting to fill out this worksheet because special considerations may apply, particularly if you or your ex have extensive assets or your children have special needs.
Will a Wealthy Parent Pay More in Child Support?
In addition to the amount of parenting time each parent spends with their child, the parent’s income is one of the main factors considered when awarding child support in Tennessee. In general, if a visiting parent has substantially more income than the other parent, they will pay a higher amount of child support to the custodial parent because they have the financial ability to do so. Conversely, if a custodial parent has significantly higher income than a visiting parent, the child support will be less. The child’s best interests may be taken into account by the court when they are determining the appropriate amount of support.
The court may consider that a child born to a parent who enjoys a high standard of living is able to share in that good fortune and the lifestyle that accompanies it. The child should be able to enjoy the same benefits of having well-off parents that they would have experienced if their parents had not gotten divorced.
Is There a Cap on Child Support for High-Income Parents?
Tennessee does place a cap on child support payments for higher-earning parents. Only the first $10,000 of monthly income is subject to child support computations. With the cap in place, the maximum child support payments an individual grossing over $10,000 a month in earnings would have to pay are as follows:
- $2,100 per month for one child.
- $3,200 per month for two children.
- $4,100 per month for three children.
- $4,600 per month for four children.
- $5,000 per month for five or more children.
Is It Possible to Request More Support Beyond the Cap?
A child of wealthy parents may have atypical expenses due to their lifestyle, which the state’s guidelines may not adequately cover. If one parent can demonstrate to the court that the child has reasonable needs beyond the cap amount, they may be awarded extra support. However, the burden of proof falls onto the requesting parent, and they must show that a preponderance of evidence supports their claim for additional child support.
Some circumstances that may necessitate more child support from a wealthy parent include:
- Building an education fund.
- Private school or lesson expenses.
- Costs for extracurricular activities, such as sports or traveling leagues.
- Bills for medical care for chronic conditions.
- Setting the child up for a career or business venture when they come of age.
How Can a Child Support Lawyer Assist if You Are Involved in a High-Net-Worth Divorce?
Negotiating an appropriate child support agreement is just one of the many unique legal challenges involved in a high-net-worth divorce. Protecting your children, your finances, and your future during this process requires the assistance of a skilled legal team with experience in these types of divorces. Brighter Day Law can provide the solid legal guidance you need to handle your divorce with confidence. We provide individualized representation to every client and dedicate ourselves to resolving your situation in the most favorable manner possible. Contact our Nashville law office today to schedule your initial case evaluation: 615-437-8808.