When a wealthy couple splits, it presents many complex issues. The existence of children further complicates matters. Unlike other couples, whose assets and incomes may be minimal, high net worth parents often spend vast sums on their children’s upbringing and education. Other financial issues may include sharing responsibility for tuition at a private school, setting up trust accounts or managed bank accounts, and contributions over time to special accounts for college education.
If the couple will live in different states or countries, special issues may arise involving regular contact by Skype, Face Time, or other providers. Scheduling visitations and passports may also present an issue after the divorce if they are not addressed in the final court orders. Finally, there are sometimes extremely sensitive issues like paternity of children which wealthy parents may wish to shield from the public record. All of these issues can be handled with discretion and expertise by the attorneys and staff at Clement Law Center. We would be pleased to protect the interests of you and your children, and can offer you excellent advice and representation in and out of court.
A divorce is already a difficult emotional experience for children. In the best-case scenario, it shouldn’t also detrimentally impact their education and financial circumstances.
Washington law determines child support responsibilities by calculating the net income of both parents. While this is easily accomplished with W-2’s for wage earners, entrepreneurs, business owners and other high earning individuals have a variety of income sources. These may include some of the following:
- Base Income
This is stable income that can be counted on regularly. It may be a base salary or periodic draws.
- Bonuses, Profit distributions and commissions
Self-employed workers often receive profit distributions periodically that fluctuate. CEOs and other executives can earn bonuses and/or commissions that vary in amount.
- Company Perks
Perks are often harder to quantify. These include things like expense accounts and car allowances.
- Passive income
Investments, stocks and bonds, interest, and rental income are common forms of passive income that may also be considered.
Identifying these forms of income and determining how they contribute to a child support determination is a challenging and complicated process that relies on many factors, such as tax implications.
The Washington child support table calculates child support payments on combined incomes up to $12,000 per month. The combined income of high asset couples often exceeds this amount. When this is the case, other factors must be considered to reach an obligation amount that is fair and sufficient for the children.
When the parents cannot agree on an amount, the court must step in and look at the unique circumstances of the situation to settle the matter. These are some of the things that the court considers.
- The needs of the children and past expenses for them
- Income sources and tax planning considerations
- The high standard of living that has been set due to wealth
There is no simple formula to make this determination. Case law applies, and each situation is weighed individually.
If you and your spouse have significant assets, a skilled and knowledgeable Washington divorce lawyer experienced in the management of high asset divorces is advisable when pursuing a divorce. Your attorney can identify the many complex matters that are unique to your situation, and help you reach a fair and equitable settlement in child support, property division and more.