High net worth affects child support

If you and your spouse have decided to file for divorce in Texas, and you have children, you must resolve numerous financial issues to achieve a settlement. If you are a high-net-worth couple, your wealth may have an impact on the court’s decisions. This is especially true regarding child support and custody.

There are several things to keep in mind when preparing for Texas child support proceedings in a divorce. Even after you have achieved a settlement, and the court issues a final decree, problems may arise down the line, in which case it’s important to know where to seek legal support. Once the judge who is overseeing your case issues a child support order, you and your former spouse must adhere to it, no matter what, or risk the judge holding you in contempt of court.

Child support is no longer tax deductible

Prior to 2019, if you were to pay child support following a divorce, you could claim it as a deduction on your federal income tax return. As of January 1, 2019, this is no longer the case. However, if you are the parent on the receiving end of support payments, you do not have to claim financial supplements ordered by the court in a divorce as income on your tax return.

What if both parents earn similar incomes?

If you and your ex are both well-off financially, and your incomes are similar, it is possible that the judge will determine that there is no need for child support in your case. On the other hand, a big discrepancy between your levels of income might mean that the court will order the higher-earning parent to pay child support.

Then again, the court decides each case on its merit, and income isn’t the only issue the judge considers when ruling on child support or custody. The court makes decisions based on what it determines is best for the children.

Did you sacrifice a career or education to stay home with your children?

If you are one of many Texas parents who have been a primary caretaker of your children during marriage, meaning that you stayed home full-time to take care of your kids, it wouldn’t be uncommon for the judge to order the other parent to pay child support in a divorce. The judge might also ask questions to determine your earning potential and take that into consideration as well when making decisions on child support issues.

What are your children’s financial needs?

As children of high-asset parents, your kids might be accustomed to certain things in life. For instance, perhaps they take private music lessons or attend a prestigious academy. A high-net-worth lifestyle sometimes creates financial needs in children’s lives. The court tries to make rulings in divorce that enable children to continue living a lifestyle that has been typical for them up to that point.