Most divorces concern issues such as parental responsibility and access and contact with the children; equitable distribution of marital assets and liabilities; alimony; child support; attorney fees and costs; and in qualified cases, post divorce, spousal support. These issues are considered common to traditional divorce cases.
Dissolutions may become more complex, and the issues less common, when the assets in dispute are of higher value. These types of situations are often called high-end divorce cases. These cases may concern numerous assets such as trusts, bank accounts, investments, stocks, bonds, inheritances or gifts. Also, joint business ownership between spouses may lead to complicated business and property valuation issues. It may become necessary to join one or more corporations as a defendant within the divorce lawsuit, particularly where you are requesting transfer of any of the corporate assets as part of the equitable distribution. In the event that the corporation is not a party to your action, the marital and family law court does not have jurisdiction to order that corporate assets to be transferred to you as part of the equitable distribution. In addition, if your spouse is ordered to transfer a corporate asset to you, you may not be able to have the corporation do so and then you would be left with no recourse.
Trusts present unique challenges when classifying and dividing marital assets in a divorce. Counsel must discover the existence of a spouse’s interest, the type of interest, and value of that interest in the trust. Counsel must decide whether to join the trust or trustee as a party to the divorce proceeding.
Additional challenging property division issues may arise in high-end divorce cases because of the unique nature of the accumulated assets, which may involve the division of real estate, pensions, 401ks, savings accounts, royalties, deferred compensation, intellectual properties, annuities, executive bonuses, vested and unvested stock options, offshore accounts, hidden assets and other commingled assets.
Our firm has years of experience in representation of high net worth clients, including those with assets and income in other states and in foreign nations. If you are entering a divorce with complex asset issues, it is important to seek a lawyer knowledgeable in high-value divorce cases and the intricacies involved. When numerous assets are in dispute, there may be business and tax consequences that stem from a dissolution, there may be valuation issues, and there may be assets that are difficult to divide. For that reason, often a forensic CPA or a certified financial planner may also be beneficial when dividing assets and determining what effect your divorce may have on your tax liabilities as well as future potential income from the asset division.
Alimony can be one of the most contentious parts of any divorce proceeding. It refers to the payments that the court orders one spouse to pay to another, separate and apart from any child support obligations the parties may have. It is the mechanism through which a spouse with greater financial resources supports a former spouse until he or she is able to establish the means to support him or herself. It’s all but inevitable that the party paying alimony will feel as if he or she is paying too much. And it is just as inevitable that the party receiving alimony will feel as if he or she is receiving too little. Money just doesn’t suffice when it comes to setting things right.
But even so, it’s important for couples going through a divorce to understand the legal issues relating to alimony, and if possible, to come to a mutual understanding about what is reasonable and fair, without a protracted legal fight. This can be especially difficult due to the stresses we all feel when it comes to discussing money and financial obligations. The person obligated to pay alimony will be fearful that he or she will not have enough money to support him or herself, whereas the person receiving alimony fears that he or she will not receive enough money to support him or herself. Many times, these fears will become manifest in hostility toward the other party, which exacerbates the sense of discord and stands in the way of settlement.
In my work with clients I find it is sometimes helpful to explain the factors a court will look at in deciding alimony in order to begin to work out an appropriate settlement. In other words, take a step back from whatever your personal grievances about your soon to be ex-spouse might be, and try to understand the objective criteria a judge is supposed to consider. There are no specific calculators or guidelines in Florida for calculating alimony but the statute does provide a list of factors that courts are required to look at in order to make an alimony award as follows:
- Demonstration of need
- Ability to pay
- The duration of the marriage
- The ages of both parties
- The physical and emotional health of both parties
- The standard of living during the course of the marriage
- Parental responsibilities
- The time and expense for the supported spouse to obtain training in order to become self-supporting
- Each parties contribution to the marriage (both financial and non-financial) including homemaking, child care, and any contributions to the career of the other party
- Tax consequences and tax treatment of an alimony award as between the parties
- Each parties income and/or ability to earn; education and employment
- Any other factor necessary to do equity and justice between the parties
In 2010, the statute governing alimony in Florida underwent significant change. The statute created a new type of alimony- “Durational Alimony”- bringing the number of different types of alimony to six. The revised statute also codified specific guidelines on the length of marriage and how that factor affects alimony. Individuals seeking spousal support may now be able to receive one, or any combination of the newly defined types of alimony. The six different types of alimony recognized by the State of Florida are:
- Bridge the Gap
- Lump Sum
- Permanent Periodic
Effective July 1, 2011, the alimony statute was significantly changed yet again. One of the most significant changes to the statute in that year was an addition to the permanent alimony section of the statute ,F.S. 61.08(8): “In awarding permanent alimony, the court shall include a finding that no other form of alimony is fair and reasonable under the circumstances of the parties.” Before the 2011 changes to the alimony statute, and before the change adding this sentence, a conventional wisdom was that for a long-term marriage there was at least some degree of a presumption in favor of an award of permanent alimony. The burden of proof for an award of permanent alimony in a moderate length marriage is “clear and convincing” and such an award in a short term marriage requires written findings of “exceptional circumstances.”
Although the Florida legislature has approved adopting a formula (guidelines) for the courts to use to determine alimony and has approved the end of lifetime alimony awards, Gov. Rick Scott vetoed the bill. These decisions will be left to future legislators, however, it is clear that alimony reform is desired by many people in Florida.
Basic Child Support in Florida
In Florida, both parents, whether married or not, are obligated to support their children. Florida follows the “Income Shares Model”, which means that courts will calculate the amount parents would spend on children as if the family were intact and living in one household, and then divide this amount between the parents based on their incomes.
For the court to implement the calculation, it must use Florida’s current statutory framework for child support, commonly referred to as child support guidelines. The formula is based upon net income levels that determine the amount of child support obligation for the parents for a given number of children in a hypothetical situation. That statutory framework is found within Florida Statute 61.30.
When child support is an issue in a court case, parents are required to file and exchange financial affidavits verifying individual income and expenses, and then complete a Child Support Guidelines Worksheet (Form 12.902(e). The filing and exchange of the financial affidavits cannot be waived by the parties.
Florida Statute 61.30 also governs what expenses may be deducted from gross income to arrive at the net income of a party upon which child support is based. Gross income includes most types of earned or unearned income. Common examples are wages, commissions, self‑employment income, bonuses, alimony, dividend or interest income, rent, worker’s compensation or unemployment insurance benefits, and pension or retirement benefits. Allowable deductions include such things as income tax payments, certain health insurance premiums, mandatory union dues, mandatory retirement payments, social security and medicare payments, alimony payments, and court‑ordered child support payments for children from other relationships.
The child support guidelines contained within Florida Statute 61.30 contains a chart of basic child support amounts. These charts are modified fairly frequently, so be sure that you have the current chart before relying on the specified amount when you are calculating a basic child support obligation.
Effect of the Parenting Plan on the Basic Child Support Obligation
If either you or your child’s other parent has primary physical access and contact time and the other parent has access and contact time of less than 20 percent of overnights (less than 73 overnights per year), the basic calculation will give you a support amount that the parent with the lesser overnights will pay the other parent. If your parenting plan includes substantial time‑sharing where each parent has the children for at least 20 percent of overnights per year(73 or more overnights per year), you will have to make additional calculations. Because total costs of raising children are higher when both parents maintain separate households for children, the guidelines follow a “gross up” method in these situations. You will first have to multiply the basic child support obligation by 150%. The amount each parent is responsible for is then allocated not only according to income but also based on the percentage of overnights per year the child spends with each parent.
You should add the monthly cost of health care for the children, including health insurance premiums and non‑covered medical, dental and prescription medication costs, as well as the cost of monthly child care either parent requires to be able to work, to the basic support obligation. Responsibility for these items is divided between the parents based on their respective incomes without adjustment for parenting time, regardless of whether you are using the basic method or the gross up method.
Deviations to the Basic Child Support Obligation
In some cases one parent may have a reason for requesting a support amount that differs from the guideline amount (called a “deviation”). Florida courts require a parent requesting a deviation to file an additional form called a Motion to Deviate from Child Support Guidelines. A court might find that a deviation is fair if, for example, the child has extraordinary expenses related to education, special needs, or medical needs, or if one of the parents has extraordinary visitation expenses or unreimbursed medical, disability, or employment‑related expenses. Courts will also consider whether or not a child has an independent source of income (not including supplemental security income) or whether either parent has significant assets available (not included in income) which could be used to pay support. The guidelines contain a detailed list of factors that a court may consider, but these factors are not exclusive; a court may consider making any adjustment necessary to achieve a fair result.
Imputing Income to a Parent
Sadly, some parents try to avoid their child support obligation by quitting a job or failing to conduct an adequate job search. For example, one parent might quit a good paying, highly‑skilled job to take a lower paying position under the mistaken belief that this will relieve them of their child support obligation. Florida courts have taken a very strong position against this kind of behavior. If a court finds that either parent is voluntarily unemployed or underemployed, it may impute income to that parent based on the parent’s employment potential in light of recent work history, occupational qualifications, and prevailing earnings levels in the community.
If a parent refuses to participate in a child support hearing or doesn’t produce adequate information regarding income and finances at the hearing, the court will automatically impute income to the parent, unless it finds that the parent needs to stay home with the child (because the child is a young infant or is disabled, for example). If there is no proof of the actual income the parent would be able to earn, the court will apply a rebuttable presumption that the income would be equivalent to the median income of a year‑round full‑time worker according to reports of the United States Census Bureau.
Modification and Termination of Child Support
Once a court has made an initial child support order, a parent who wants to modify (change) the order must show a substantial and ongoing change in circumstances. Some examples of changes that might justify modification would be one parent’s getting a much higher paying job or the parents making a permanent change in the number of days per week that each of them spends with a child. Generally, Florida courts won’t consider a modification unless the difference between an existing award and the amount determined by a new analysis and application of the current guidelines would be at least 15%, or at least $50, whichever amount is greater; however, even this amount of variation won’t justify a change in the support order in every situation.
In Florida the support obligation normally continues until a child who has finished high school turns 18, or until a full‑time high school student turns 19.
Tax Consequences of Child Support
Unlike alimony (sometimes called spousal support), the payment of child support is not tax deductible for the payor and it is not charged as income to the payee. In other words, the parent who pays child support to the other is not entitled to a tax deduction for payments made, and the parent receiving the payments does not pay income taxes on child support payments received. In times past couples used to have some flexibility in setting child support and alimony payments. As a result, paying spouses would attempt to gain a tax advantage by agreeing to pay a higher alimony amount (which is tax deductible) and a correspondingly lower child support amount. However, because of the child support guidelines (which set forth presumptive child support amounts), it is increasingly difficult for paying spouses to accomplish this.
Failure to Pay a Child Support Obligation
In Florida, there are few occasions where failure to meet a court ordered obligation is actually punishable by contempt. Failure to pay court ordered child support is one of those obligations however that is punishable by contempt. That means that if a parent is ordered to pay child support by a court of law, and they fail to meet their obligation, the judge may hold them in contempt of court. If a parent is obligated to pay a certain amount of child support per month, it is presumed by law that the parent has the financial ability to pay that amount of child support that had been previously ordered. If that presumption is not rebutted, the judge may likely hold that parent in contempt. If a parent with a child support obligation, or “obligor,” is found to be in contempt of court, the judge may order that parent to pay a certain amount of money towards their child support within a certain time frame or they might put that parent in jail.
There are unusual nuances concerning the calculation of child support and the parameters upon which a court calculates a parent’s obligation. These parameters include but are not limited to, the consideration of child support in a “good fortune” situation, which is the name given to child support awarded by the court above the amount specified in the child support guidelines.
Please contact an attorney who is experienced in family law matters when attempting to resolve an issue concerning your child support obligation.
How is Child Support Calculated?
Child support is calculated using Florida Statute 61.30. First, each parent’s net income must be determined. “Net income” is defined as gross income minus allowable deductions.
“Gross income” includes the following:
- Salary or wages.
- Bonuses, commissions, allowances, overtime, tips, and other similar payments.
- Business income from sources such as self-employment, partnership, close corporations, and independent contracts. “Business income” means gross receipts minus ordinary and necessary expenses required to produce income.
- Disability benefits.
- All workers’ compensation benefits and settlements.
- Unemployment compensation.
- Pension, retirement, or annuity payments.
- Social security benefits.
- Spousal support received from a previous marriage or court ordered in the marriage before the court.
- Interest and dividends.
- Rental income, which is gross receipts minus ordinary and necessary expenses required to produce the income.
- Income from royalties, trusts, or estates.
- Reimbursed expenses or in kind payments to the extent that they reduce living expenses.
- Gains derived from dealings in property, unless the gain is nonrecurring.
Allowable deductions from gross income include:
- Federal, state, and local income tax deductions, adjusted for actual filing status and allowable dependents and income tax liabilities.
- Federal insurance contributions or self-employment tax.
- Mandatory union dues.
- Mandatory retirement payments.
- Health insurance payments, excluding payments for coverage of the minor child.
- Court-ordered support for other children which is actually paid.
- Spousal support paid pursuant to a court order from a previous marriage or the marriage before the court.
Both parents’ net incomes are added together and the basic child support obligation is determined using the chart found in the Florida Child Support Guidelines Worksheet. You can access the Florida Child Support Guidelines Worksheet here (in PDF format). Find the combined net monthly income of the parents and move across the column to find the number of minor, dependent children to find the basic child support obligation.
Is there a Consideration of Health Insurance or Day Care Paid on Behalf of the Child?
The amount paid for health insurance premiums for the child, as well as 75% of day care or child care costs incurred because of work or school can then be added to the minimum child support obligation.
Is a Deviation from the Guidelines ever Permitted?
The Florida Child Support Guidelines are considered presumptively correct in all cases. However, pursuant to 61.30 (11)(a), the court may adjust the minimum child support award according to Florida law, or may adjust either or both parents’ share of the minimum child support award, based on the following considerations:
- Extraordinary medical, psychological, educational, or dental expenses.
- Independent income of the child, not to include moneys received by a child from supplemental security income.
- The payment of support for a parent which regularly has been paid and for which there is a demonstrated need.
- Seasonal variations in one or both parents income or expenses.
- The age of the child, taking into consideration the greater needs of older children.
- Special needs, such as costs that may be associated with the disability of a child, that have traditionally been met within the family budget even though the fulfilling of those needs will cause the support to exceed the proposed guidelines.
- Total available assets of the obligee, obligor, and the child.
- The impact of the Internal Revenue Service dependency exemption and waiver of that exemption. The court may order the primary residential (custodial) parent to execute a waiver of the Internal Revenue Service dependency exemption if the non-custodial parent is current in child support payments.
- When calculation of the child support guidelines requires a person to pay another person more than 55% of his or her gross income for a current child support obligation resulting from a single support order.
- The particular shared parental arrangement, such as where the child spends a significant amount of time, but less than 40 percent of the overnights, with the non-custodial parent, thereby reducing the financial expenditures incurred by the primary residential parent; or the refusal of the non-custodial parent to become involved in the activities of the child.
- Any other adjustment which is needed to achieve an equitable result which may include, but not be limited to, a reasonable and necessary existing expense or debt which the parties jointly incurred during the marriage.
For incomes falling below the child support guidelines, a calculation will be made on a case-by-case basis.
Unless otherwise ordered by the court or agreed to by the parties, the obligation to pay the current child support for that child is terminated when the child reaches 18 years of age or the disability of nonage is removed. The termination of the current child support obligation does not otherwise terminate the obligation to pay any arrearage, retroactive support, delinquency, or costs owed by the obligor.
“Absent a finding of physical or mental deficiencies, there is no legal duty to pay child support beyond the age of eighteen. Even though most parents willingly assist their adult children in obtaining a higher education, any duty to do so is a moral rather than a legal one, absent either a finding of legal dependence or a binding contractual agreement by the parent to pay such support.” See Carlton v. Carlton, 670 So.2d 1129 (Fla. 2d DCA 1996).
There is also a “grossed up” statutory formula applied when a parent spends a substantial amount of time with the child, i.e., he or she spends at least forty percent (40%) of the overnights with a child.
If One Parent Refuses to Honor the Time Sharing Plan, does that Party Waive the Right to Collect Child Support?
No. When a parent refuses to honor the other parent’s rights under the time-sharing schedule, the parent whose time-sharing rights were violated shall continue to pay any ordered child support or alimony.
Are there Alternatives to Litigation?
Yes. Carmen R. Gillett is also available to serve as a divorce mediator. She has been certified by the Supreme Court as a Family Law Mediator. She has significant mediation experience. When working as a mediator, she will work to help parties to resolve their divorce issues through settlement and negotiation. In mediation, the mediator does not decide your case, but will help to negotiate and facilitate a mutual agreement.