Parents who divorce face the reality that two homes will be trying to meet budgets on the same income that once supported just one. The children will go back and forth between these two homes spending significant time in each home. Best outcomes for the children dictate they should feel comfortable at each home and believe that mom’s house is their house and that dad’s house is their house. It is one of the child support policies in California that the children shall enjoy the lifestyle of both of their parents when at either house.
Studies indicate two houses of relatively comparable lifestyle instead of one increases the overall budget for basic living expenses in both houses over the former one household by about 30 percent. Since parents do not get a 30 percent pay raise to accommodate this increase in expenses some method of sharing income is required. California has established child support guidelines for the courts to use in fashioning child support orders. Child support is how California assures that children are financially supported in both households by both mom and dad.
In truth, the problem of child support is the same financial problem families have been solving since the first year of marriage. It is a budgeting problem. How do we live within our means? What is the budget, not in one house but in two houses, now?
The answer to this question may be arrived by asking a court to make the determination or by the mutual agreement of the parents.
The California Child Support Guidelines
The courts, when asked to apply the Child Support Guidelines, first take all the available income of both parents and do a basic tax analysis to reach the total after tax available income for each parent to contribute to the children’s needs through support. In terms of priorities, taxes get paid first and then, before anything else, support for the children gets paid [if there will be spousal support it would come next]. Child support is not meant to cover more than the basics: keeping a roof over the children’s heads, household utilities, food on the table, medical insurance premiums paid, etc. This applies to both households.
This is accomplished by allocating money from the total ‘pot’ of after-tax spendable income of both parents to each household to follow the children and provide for them while they are in each household. In most circumstances this happens by shifting income from the higher earning spouse to the lower earning spouse to allow the children to have a comparable lifestyle with their basic needs met at each home.
The actual formula set forth in the California Family Code to determine the allocations is an algorithm so complex and time consuming to work out by hand that courts have adopted a few computer programs that run the calculation in minutes. X-Spouse and Dissomaster are the most commonly used programs by local courts.
Beware: one size may not fit all!
These programs work best for W-2 earners and those with simple financial pictures, but it does not work so well for those who have complexities in their finances. Similarly, it cares not for your budget needs.
The Guidelines were written for everyone in the state without considering the myriad of ways that people’s actual circumstances may vary. For example, determining actual income for small business owners or capital investments that throw off income may not easily lend themselves to a guideline calculation or there may be children with special gifts or needs.
These circumstances often lead to expensive and lengthy litigation and trials to help the court determine what figures to use or to deviate from in applying the guidelines.
This is a good place to say, when you ask the court to establish your child support order, the judge may only run the calculator program and make an order based on the results. The Judge may only deviate from the results in a limited and very specific circumstances. Their discretion is very limited in this area.
Parent Generated Child Support Agreements
Parents may make their child support arrangements by mutual agreement.
The practical reality is as long as there are minor children [and sometimes beyond minority] parents are tied together financially. Creating a financial plan that provides for everyone in both households is what child and spousal support are intended to do. Sitting down together with all the financial information and your projected budgets to make a financial plan that ensures “everybody’s boat floats” results in child support agreements that better reflect your family, your children’s needs and will be more durable.
Easier said than done? Maybe finances have been an area of disagreement during the marriage?
The Mediation process or the Collaborative Divorce process have the professional resources to assist spouses in developing their own child support agreement.
How Mediation or Collaborative Divorce Can Help
First, you should know that most family law attorney – mediators/collaborators have the Dissomaster or X-Spouse child support calculator programs and can help you with what might be the result of an application for court order child support. However, we can do more than that.
Your mediator or, in more complex circumstances, a neutral financial specialist working in this confidential process can provide straight information on the financials, on the taxes, and assist you with budgets and making a financial plan for the future. This is more in depth than just running the numbers through a calculator and is the best way for the family to be sure that the child support is there for the children.
Once you have reached an agreement you must reduce the agreement to a legally sufficient, durable, and enforceable order which must be filed with the court and registered with the State. Your mediation or collaborative professionals will be able to simplify and expedite these requirements for you.
Modification of Child Support Order
Many parents have lost their jobs due to mandatory shutdowns of businesses in California due to COVID-19. When there is a loss of income for the parent paying child support, that parent needs to ask for relief from the court as soon as possible. If the parent waits too long to ask the court for a modification of the order, the parent may already be in arrears and behind the legal eight-ball.
In Mediation or Collaborative Divorce, the financially struggling parent could come to the professionals who would help make a new plan for court approval and assist with ways to deal with the struggle.
For assistance with your child support questions, contact us at Family Peacemaker for a free one hour consultation.