GRB Law. Goehring Rutter & Boehm. Straightforward Thinking.

High income families just got another hurdle to clear in child support cases

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When parents decide to go their separate ways, one of the most hostile elements of a divorce can be the care of their children in separate households.

 

Wealthy parents who pay child support are likely to face a different set of headaches in the court system thanks to a recent Pennsylvania Supreme Court ruling that will hold them to a different standard than less affluent parents whose support payments are based on set guidelines.

 

Parents who earn more than $30,000 a month in net income will be required to pay enough monetary support so that the child will be able to maintain whatever lifestyle the child has grown accustomed to — meaning the sky could literally be the limit.

 

Prior to the court decision handed down last month, child support for parents at all income levels was based on guidelines that predicted the economic needs of a child.

 

But the state Supreme Court has decided that for wealthy households, need becomes less easily calculated by a set formula.

 

Going forward, child support payments will instead be based on how much it will cost to maintain the lifestyle a child is accustomed to without burdening the custodial parent.

 

“You basically look at the family’s lifestyle and the child’s lifestyle,” said Lisa Turbeville, a divorce financial analyst and owner of Watermark Financial in Mt. Lebanon. “There could be private school, vacations — maybe the family has different properties they travel to and from. The children might all have cars.

 

“There’s a lot of different activities and things higher income families might do that other people wouldn’t be able to afford,” she said. “All of their expenses — such as clothing — tend to be higher.

 

“I have a client whose teenage daughter wants a $400 purse for her birthday and that’s normal to them. That’s what she’s used to.”

 

The court decision stems from a Delaware County case Hanrahan v. Bakker in which a father paying child support earned $15.5 million in the year 2012 while the mom earned $105,000. The father, who would have been required to pay more than $60,000 a month in child support based on state guidelines, appealed the amount arguing that the child didn’t need $60,000 a month.

 

“There was no research to justify how much support a child would need after the parents’ combined income exceeds $30,000 a month,” said Mary Vidas, a matrimonial and family law partner at the Blank Rome law firm in Philadelphia.

 

Lea Anderson, chair of the Allegheny County Bar Association’s Family Law Section and a family law attorney at Goehring Rutter & Boehm, Downtown, said the Supreme Court decision on child support for high income earners will make it more difficult to settle collaborative divorce cases.

 

Collaborative divorce cases are settled between the two parties outside the court system. Child support guidelines are not considered in a collaborative divorce. Parents can be more creative in agreeing what a child needs and how those needs will be paid for.

 

“The court ruling removes the ability to be predictable and objective in calculating child support for these high-income earners,” Ms. Anderson said. “It now opens a whole line of inquiry on children’s reasonable needs, lifestyle and the parents’ lifestyle.”

 

She said this will result in more hearings on highly contested aspects of lifestyle, whereas before parents could use the state child support formula to predict what the child support payment would be.

 

Ms. Anderson added that regardless of what the court determines a child’s lifestyle needs to be, child support payments for parents earning more than $30,000 a month would not be lower than the highest payments for families earning below $30,000 a month in net income.

 

Based on Pennsylvania’s basic child support schedule, the monthly child support obligation when the parents have a combined income of $30,000 is $3,902 for two children; and $5,768 for families with six children.

 

To view the article on the Pittsburgh Post Gazette website, click here.

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