How Is Child Support Calculated in a Texas High Net Worth Divorce?

 Posted on January 06, 2021 in Child Support

Divorcing spouses will need to address many different legal and financial concerns when ending their marriage, and in many cases, a divorce case will become more complex when a couple has children. In addition to determining how they will share child custody, parents should also understand their child support obligations. In cases where a couple has a high net worth, parents may need to address additional financial issues when determining the amount of child support that will be paid.

Texas Child Support Guidelines

The state of Texas uses a straightforward “percentage of income” method to calculate a parent’s child support obligations. The parent who has the majority of the time with the children and is granted the right to decide where children will live is known as the custodial parent. The non-custodial parent will typically pay child support to the custodial parent. The amount of child support is calculated by taking a percentage of the non-custodial parent’s “net resources,” as follows:

• One child: 20% of the non-custodial parent’s net resources
• Two children: 25% of the non-custodial parent’s net resources
• Three children: 30% of the non-custodial parent’s net resources
• Four children: 35% of the non-custodial parent’s net resources
• Five children: 40% of the non-custodial parent’s net resources
• Six or more children: At least the amount that would be paid for five children

A non-custodial parent’s net resources are determined by taking the income they earn and subtracting federal and state income taxes, Social Security taxes, union dues, and amounts paid toward their children’s health insurance, dental insurance, and other medical expenses. In high net worth divorce cases, a parent’s income may not only include the wages they earn, but also interest and dividends on investments, income earned from rental properties, capital gains, income earned from trusts, annuities, pensions, retirement benefits, and gifts.

Couples with a high net worth should also be aware of the maximum amount of monthly net resources that may be considered to calculate child support obligations. This amount is adjusted regularly to reflect inflation, and in 2020, it is set at $9,200. If the non-custodial parent’s net monthly resources are higher than this amount, the applicable percentage specified in the child support guidelines will be applied to the net resources that do not exceed this amount. A court may also order additional child support to be paid based on the child’s proven needs, which may include school tuition, tutoring, additional medical expenses, or extracurricular activities.

Contact Our Austin Child Support Attorneys

During a high net worth divorce, many different financial factors will need to be addressed when determining child support obligations. Parents may have complex and variable forms of income, and children may require significant financial support to ensure that their needs will be met. At Powers Kerr & Rashidi, PLLC, our attorneys can help you address these financial issues while making sure your children’s best interests are protected throughout your divorce. To learn more about how we can help protect your parental rights and financial interests, contact our Austin, TX high net worth divorce lawyers today at 512-610-6199.

Sources:

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.154.htm#154.125

https://csapps.oag.texas.gov/system/files/2019-12/2020_taxcharts.pdf