How Do Child Support and Alimony Work in High-Income Divorce Cases?

What is a High-Asset Divorce?

If one or both spouses have a high income, and their marriage is heading towards a divorce, it will likely be considered a high-net-worth divorce. Any assets acquired during the course of the marriage will be considered community property as per California law. This means that if the divorcing couple has earned or purchased substantial assets during their marriage, that property will be divided equitably between the divorcing spouses (what is ‘equitable’ is left somewhat up to the interpretation of a family law court).

Any wealth or assets acquired prior to the marriage may be considered separate property. Separate property is not subject to asset division the same way that Community property is.

High-asset divorce cases concern a larger number of assets and may also address additional asset categories that a typical divorce case does not. For example, high-net-worth divorces may include disputes over real estate property, boats and yachts, business holdings, security portfolios, stocks and bonds, and bonuses. There is also the potential for high-income divorces to tackle other complex legal matters such as copyrights, trademarks, patents, and business ownership.

When going through a high-income or high-asset divorce, it is strongly recommended that you retain professional legal representation from experienced divorce attorneys. Our law firm has extensive experience representing difficult family law cases, including high-income divorce cases. To learn more about our legal services, don’t hesitate to get in touch with our law firm to schedule your initial consultation today.

When Does a Household Qualify as ‘High-Income’ in California?

According to a recent poll, most Americans think you need to earn at least $100,000 or more a year in order to be considered rich. However, California is not like most states. To be among the top 5% of earners in California, you need to make a lot more than that.

In California, you’ll need to make at least $250,000 a year to reach the lower limit of the top 5%. To be considered among the top 1% of earners in the state, you need to make at least $844,266.

Can High Income Impact Alimony and Child Support?

In California divorces, more money usually means more problems.

Just as a high-conflict divorce will likely take longer, a high-asset divorce also tends to take longer to resolve because of the additional legal concerns involved.

The substantial amount of money or property involved in a divorce case also tends to mean that there will be more complicated legal discussions surrounding the issues of child support and alimony (also known as spousal support or spousal maintenance).

When dealing with high-income divorce cases and alimony or child support legal matters, it is highly recommended that you retain professional legal representation from experienced lawyers. Please get in touch with our California law office to schedule your confidential case evaluation today.

How Does High Income Affect Child Support Matters?

Family law judges are ordered to follow California child support guidelines when considering child support orders. Some of the factors that a family law judge must consider include the number of children in the relationship, the income of each parent, parenting time, health insurance, and certain tax deductions. A child support calculator will be utilized to help prepare the calculations as well.

In high-income divorce cases, things can become slightly more complicated.

California’s child support guidelines have a maximum income limit beyond which the guidelines no longer apply. For parents who have incomes that exceed the limits as established in the guidelines, it can be more complex to determine appropriate child support obligations.

High-income parents may also have additional expenses, such as health care costs, costly private school tuition, and other social activities that must be paid for their children. These expenses may be considered when factoring in child support obligations.

To determine child support payments for high-income parents, family law courts typically take the following steps:

• Calculate basic support.
• Take additional expenses into consideration.
• Consider a child’s needs when income surpasses the guideline limits.
• Factor in tax considerations for high-income child support cases.

How is Alimony Calculated in High-Net-Worth Divorce Cases?

The amount of money that either spouse makes will play a central role in determining the need for alimony payments and just how much those alimony payments should be. If both spouses have high incomes, it may not be deemed necessary for one spouse to provide the other spouse with alimony payments.

However, if one spouse makes a great deal of money and the other spouse does not, it may be more likely that a family law judge will order alimony payments in order to help the supported spouse maintain a certain standard of living.

Typically speaking, the more income available, the greater the likelihood of higher alimony payments. In order to work things out more amicably, high-income married couples typically consider prenuptial or postnuptial agreements, as well as mediation tactics, when working out complex legal matters surrounding alimony.

Is it Possible to Oppose or Modify Child Support and Spousal Support Orders?

After a California court orders child support or alimony, it can be an uphill process to challenge or modify those orders. Typically, a party must demonstrate a significant change in circumstances to justify modifications to child support or alimony payments.

If one parent or ex-spouse wishes to modify an existing child support or alimony court order, they may do so with the help of professional legal representation. However, the other party has an equal right to oppose this request.

Schedule Your Initial Consultation with Our Family Law Attorneys Today

High-income couples are encouraged to retain professional legal representation when going through divorce cases and the complicated legal matters surrounding alimony and child support. Hepner & Pagan is a California law firm based out of Campbell, CA, that proudly serves clients in complex family law issues. To discuss your high-income divorce case in more detail, we encourage you to reach out to our family law firm to schedule your initial case review today.

You may reach us at 408-688-9153. We look forward to speaking with you.