Navigating Child Support for High Income Divorces

Legal court gavel on assorted cash - high income divorce concept

When well-off individuals get divorced, it can often feel like each issue in the case comes down to how much money the high-income spouse will pay to the less well-funded spouse. Children have the right to receive support from both parents, but how much a parent should pay can be a difficult question. Navigating child support for high income divorces means finding the balance between the parents’ resources and the child’s actual needs.

How Child Support Obligations are Calculated

In Michigan, every child support order starts with a calculation using the Michigan Child Support Formula, based on each spouse’s income and their share of parenting time overnights. That formula determines each parent’s share of the child’s “base support” according to the combined income of both spouses.

This isn’t just a question of wages. The formula is designed to include any form of regular income that a parent in a marriage would naturally use to support their child. In high-income divorces especially, a parent’s income can include:

  • Stockholder disbursements from business ownership interests
  • Trust income from family trusts
  • Returns on stocks and other investments
  • Rental payments on investment properties
  • Other non-traditional sources of income

However, when that formula is applied to child support for high income families, it can result in child support payments totaling thousands of dollars every month. Historically, this was one of several reasons a court could “deviate” from the recommended amount to enter a different child support order.

Child Support in High-Income Divorces

That’s why in 2021, the Michigan Supreme Court added language to the Michigan Child Support Formula, to give Courts more freedom in tailoring child support in high income divorce cases. The formula states that in “extremely high-income” cases, the Courts can adjust the formula’s base support to better reflect the child’s needs. This exception to the standard formula applies when the family’s combined income “greatly exceeds the highest ‘Income Amount’” in the general support tables. As of 2021, that means a combined income of $10,581 per month or $126,972 per year. That means families with two professional incomes can easily exceed the highest level of the support table.

Your high-income divorce attorney can argue that when your family’s combined income greatly exceeds that limit, a different child support amount will be enough to meet your child’s needs. However, those needs should include the reasonable luxuries generally afforded to the children of high-income families such as:

  • Private school tuition
  • Tutoring and private lessons
  • Extracurricular activities
  • Vehicles
  • Pets
  • Vacations

Providing for Children Outside of Child Support

Notably, even using the 2021 rules for extremely high-income child support cases, there are certain kinds of support that are outside the authority of the Court. Child support in Michigan ends when children turn 18 or graduate from high school up to age 19½ assuming there is a reasonable expectation the child will graduate. No Michigan court can order a non-consenting parent to pay for the children’s college education. However, you and your co-parent can agree to share their child’s extracurricular and post-high school expenses to give your children the best chance they have for success. Most attorneys are hesitant to obligate their clients to such expenses, especially when it is a long way down the road, because a child’s college performance is not always predictable. If a child is abusing their college experience, a parent may not wish to continue funding that experience. Often, attorneys recommend parents agree to pay these expenses for so long as they are willing to do so. Another alternative in high asset families is to purchase college tuition in advance through a MET 529 plan, a Michigan Education Savings Program, or other such programs, which may have tax advantages to the donors. Consult your financial planner about these options before, or early in the process of divorcing.

At NSSSB, Attorney Lori Buiteweg recently acted as a high-income divorce lawyer in a case involving an NFL player. The judge in that case felt that the Michigan Child Support Formula calculation was too much money. Attorney Buiteweg proposed putting the money in a trust for the benefit of the child. This would keep the funds from improperly supporting the other parent, and instead allow the child to use that money to pursue higher education after they turn 18.

Get Help from a High-Income Divorce Lawyer

If your child is raised in a high-income household, you need help from a high-income divorce lawyer to make certain that your income is being used for your child’s benefit. At NSSSB, our Ann Arbor family law attorneys help parents keep the focus on their kids, and advocate for a child support award that protects your child’s best interests. Click here to schedule a consultation with one of our experienced attorneys.

Categories: Child Support