High-Income Earning Parents
Are you a high-income earning parent, or had a child with a high-income earning parent and thinking about filing for divorce or a paternity action? If so, there are various things you should know about how child support is calculated, as there are substantial risks to consider any time you are involved in a divorce or other family law case.
In Florida, child support is usually calculated by using the child support guidelines set forth in Florida Statute. However, when an award of child support exceeds the amount specified in the child support guidelines, it is known as “good fortune child support.” It is based on the notion that the child should benefit from the parents’ good fortune and financial success rather than be limited to basic needs support. In Finley v. Scott, 707 So.2d 1112 (Fla. 1998), the Florida Supreme Court elaborated on the issue of whether a trial court has the right to deviate from the support guidelines. The Florida Supreme Court stated that in making this fact-intensive decision in future cases, trial courts are to begin their determinations of child support by accepting the statutorily mandated guideline as the correct amount. They are then to evaluate from the record the statutory criteria of the needs of the child, including age, station in life, the standard of living, the financial status and ability of each parent, and any other relevant factors. If after those evaluations a trial court concludes that the guideline amount would be unjust or inappropriate and determines that the child support amount should vary plus or minus five percent from the guideline amount, then the trial court must explain in writing or announce a specific finding on the record as to the statutory factors supporting the varied amount. The trial court is also to consider the financial status and ability of each parent and any other relevant factors as stated in Florida Statutes 61.30.
Another important consideration for cases involving a high-income parent is the possibility of modifying child support once a court order has been entered. Notably, a substantial increase in the payor’s income is itself sufficient to constitute a change in circumstances warranting an upward modification without any demonstration of increased need on behalf of the residential parent or the child. However, courts have recognized that a child is only entitled to share in the good fortune of his or her parent consistent with an appropriate lifestyle, and in those cases, the courts have ruled that trial courts are fully capable of making the determination of an appropriate amount of support.
You may be wondering if a high-income earning parent pays for the private school, or gives the other parent gifts for the child, etc., does that count towards what is a high-income earning parent has to pay in child support? Generally, under the child support statute, the determination of gross income for each parent should include reimbursed expenses and in-kind payments that reduce living expenses. However, gifts received by a parent are irrelevant as they relate to a child support determination. For example, imputing as income a monthly gift amount to help pay for private school was an error because the payments would not continue in the future. Therefore, reliance upon past gifts should not be factored into income to determine the need for support. It is also an error to consider family gifts and loans in a child support modification. However, if the gifts are regular periodic payments, the court may take this into consideration when making its child support determination.
In a high-income earning parent case, there may be the need for a forensic accountant or other qualified financial experts who will be able to provide the court his or her expert opinion regarding the financial needs of the parties’ child and the financial circumstances of the parties. Our firm has extensive experience in dealing with high-income earning parents and we can help you with the complexity of these types of cases.
Our firm offers in-person and virtual consults, if you have any questions or concerns about the topic of this Article or any corporate or family law issue, please feel free to call our office at 305-460-0145 or to schedule a consult here.
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