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September 29, 2020 Blog

Child Support in High Net Worth Divorces: What You Can Expect

child custody during each stage of covidDivorces, especially high net worth divorces, can easily get messy. With lots of assets and income to consider, it can be a challenge to figure out what’s fair and how those assets should be divided. Child support can also be a major point of contention–aside from asset distribution, the biggest financial consideration in high net worth divorces is support payments. 

Once the divorce is settled, you’ll be paying child support until your children reach adulthood. While you want to make sure that your children are well-provided for, the payments requested in a high net worth divorce can be quite large, and sometimes, excessive. Here are some things to expect and consider when negotiating high net worth child support in North Carolina.

The Basics of Child Support in North Carolina 

During the separation period and after the divorce, both parents are expected to support their children. However, only the non-custodial parent is obligated to make payments on a set schedule; the custodial parent takes care of most expenses directly. This is a standard arrangement that typically continues until the child reaches the age of 18. 

Support payments are based on the income of both parents, but they are also based on the amount of support needed to sustain the child or children’s accustomed lifestyle. Considerations like private school expenses, ongoing medical care, extracurricular costs, and vacations often come up in high net worth divorces and must be discussed during negotiations or in the courtroom. 

In a standard divorce, child support payments will vary depending on a number of different factors, including the amount of time each parent will spend with the children. While this is also true in high net worth divorces, the process of deciding on an appropriate support payment can be very challenging. An experienced family and divorce lawyer will provide support and advice on what is and isn’t fair and reasonable. 

Base Support is Calculated From Gross Income

In most North Carolina divorces, child support is calculated based on the gross income of both parents. If alimony will be paid after the divorce, those payments will count as income for the spouse receiving them. However, the state guidelines and worksheets for calculating child support do not extend above an annual income of $300,000 per year, so high net worth divorces generally involve more negotiation and itemization. 

Why do the guidelines stop at $300,000? 

Mainly because if the non-custodial parent is a high earner, then the amount of support based on income might be excessive for providing the children with an appropriate lifestyle. It isn’t always appropriate for a high-earning parent to contribute a standard percentage of his or her income. At a certain income level, the percentage would far exceed the needs (and even the wants) of the children. 

Custody Affects Support Payments

Sole custody in North Carolina is defined as one parent having custody of the children for 243 or more nights each year. Shared or joint custody means that each parent has the children for at least 123 nights every year. Split custody means that the parents each take sole custody of one or more of the children. Only you can decide on the structure that works best for you and your children, but you should know that your custody arrangement will affect your support payments. 

Obviously, if you are spending more time with your children, then you are also spending more money on them directly and your payments will be lower. Custody and child support are issues that cannot be separated from one another, and you must negotiate them together to ensure that the arrangement is fair and realistic for both parties. 

How Will the Money Be Spent? 

One of the biggest pain points that can come up in determining child support is how that money will be spent. If you, as the non-custodial parent, don’t agree with how your ex is spending the money you send each month, you’re pretty much out of luck. Once you’re divorced, your ex will have a lot of leeway in how the money is spent. It’s very common to worry that you’ll be supporting your ex’s lifestyle instead of your children’s!

While it is possible to petition the court if you think your ex is spending the money frivolously, excessively, or for themselves instead of the children, it’s often easier to rethink your custody arrangement than to argue against a larger support payment or to hold your ex accountable after the initial agreement is signed. If you can agree to split or joint custody, then your support payments will be lower and you’ll have more control over your children’s expenses. However, you will have to consider how joint custody will work with your lifestyle and your ability to earn. 

How is Support Negotiated? 

Whenever possible, it is best to negotiate the terms of high net worth child support outside of the courtroom. In North Carolina, a divorcing couple must live separately for one full year before a divorce will be granted. During this time, the parties may discuss the terms of the divorce during negotiation or mediation to avoid litigation. Getting the courts involved is the last resort and is generally only necessary when a divorce is highly contentious. 

In a high net worth divorce, it is important to seek legal representation right away, even if you and your ex are mostly in agreement on issues such as asset division and custody. A divorce lawyer will advocate for you and help you navigate the process, which can become very complex. They will help you to retain the assets you’re entitled to and help you negotiate a fair agreement for child support. 

Be Specific in Your Agreement 

If you are able to work out the terms of your child support agreement amicably, then you might not be worried about problems that could come up down the line. But if circumstances turn sour in the future and your agreement is vague or informal, you could find yourself in a difficult situation. 

Ensuring that your agreements are specific and formal during high net worth divorce proceedings is absolutely crucial. If you don’t specify dollar amounts and payment frequency, then it may be difficult to pursue legal action if one party doesn’t hold up their end of the informal agreement. 

Try to Stay Civil

In high net worth divorces in North Carolina, child support discussions can get contentious. Whenever possible, however, it’s better to keep the negotiations out of the courtroom.  Negotiation or mediation are always the best options, as they allow you to avoid a public legal battle and protect your children from any ugliness that might come out during litigation. 

Staying civil during the child support discussions whenever possible will be in the best interests of everyone involved. Depending on the situation, it might be challenging to cooperate with your ex. But it’s important to keep things friendly and try to work out a deal that is fair and reasonable for both parties. Your attorney will help you through the mediation process, but you will need to take it upon yourself to be civil, even when you’re feeling frustrated. 

Can Child Support Be Renegotiated? 

Life is always changing. Although most child support agreements are intended to last until the child turns 18, things happen. Your children’s needs might change, your income might drop, health problems might affect you or your ex, or something else could happen that would require you to renegotiate the terms of the child support agreement. 

Generally, a renegotiation begins as a discussion between the parents. Communication is key in these situations. Your attorney should be able to help you through the process once again and get the new agreement approved by the court. Renegotiating child support payments requires supporting documentation and can be a challenging process, but it is sometimes necessary. 

Remember: Child Support is For Your Child (But Be Realistic) 

In many high-income divorces, the non-custodial parent might be worried that their ex is trying to get more money for themselves. While it’s certainly true that some people will try to take advantage of the situation, it’s important to think about what child support is really about: ensuring that your children have what they need. 

You don’t need to say yes to a high monthly number because you feel guilty, but you do need to be realistic about what amount is fair and what kind of lifestyle your children should have when they are not in your direct care. When you discuss your case with a North Carolina divorce lawyer, they will help you to determine how much support is appropriate. 

At Gailor Hunt, we understand the complexities and challenges of high net worth divorces. There’s no “one-size-fits-all” approach to determining child support and asset division, and our experienced attorneys aren’t afraid to get tough and advocate for you. To learn more about the process and to discuss representation, call our Raleigh divorce and family law practice at (919-367-1512). 

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