Excerpts from How to Avoid the Divorce From Hell Chapter 22: Support Guidelines When you first consult an attorney, you will probably be told that states are required to establish mandatory guidelines for child support as a condition of receiving federal funds. The actual guidelines vary dramatically from state to state. One trend seems to be clear: The formulas applied are steadily taking a larger and larger percentage of the payor’s income, making for very unhappy payors. The goal behind guidelines was to standardize support so that couples in similar financial circumstances received comparable support orders. Guidelines have generally achieved that goal, albeit at the expense of the judge’s discretion to tailor an order to the specific needs of an individual family. If you are the recipient of support, your award is going to be very similar to the one received by anyone else in the state who has the same incomes as you and your spouse. It may be totally unfair if you have significantly higher or lower fixed expenses than the norm, but the award may not take that into consideration. So be it. That is the price paid by individuals for overall consistency in support orders. The final support figure is likely to be based upon a computer program. You would be well advised to learn as much as you can about whatever guidelines or computer programs are used in your jurisdiction. Each of them varies because they are based on different tax, input, and even cultural assumptions. The underlying philosophy varies radically from state to state, and this issue is very much in flux as new federal mandates are being implemented. If you have the choice of filing for divorce in one of two or more jurisdictions, you would be wise to research the variations between them before making a decision. There are, however, certain common denominators. Guidelines are generally driven by taxes and income. The computer will want to know how many children there are, with whom they primarily reside, and the incomes of both parents. It may then want to know about those expenses that are tax-related, such as mortgage interest. Some guidelines consider after-tax consequences of the payment or receipt of support, and others don’t. They may or may not be interested in the exact percent of time the children spend with each parent, or how much the parent with primary custody earns. They may want to know how many other children the payor is responsible for supporting. Generally, the computer will not make allowances for non-tax-related expenses such as utilities or consumer debt. The computer will then apply the local guidelines and spit out a combination of child and spousal support or, occasionally, a “family support” figure, which lumps them both together for tax purposes. In some jurisdictions, the result will be mandatory with limited exceptions; in others, only the child support component will be mandatory. Some jurisdictions don’t even have alimony guidelines. Others totally disregard the custodial parent’s income, no matter how high it is or put a cap on child support in high income cases. There is an interesting twist in the relationship between tax and support in some of the computer programs. If you run the program without regard to your mortgage payment, you will get one number for support. If you then remember that you actually have $1,500 per month of tax-deductible mortgage interest and plug it in under the recipient’s column, the support will go down. “What?” you shriek. “I just added a bill that I have to pay and my support goes down?” Precisely. This is because the mortgage interest is deductible on your tax return, and therefore the computer will say you don’t need as much money because you’ll be deducting the mortgage interest and as a result you will pay less in income taxes at the end of the year. The reverse is true if you are the payor of support. If you run the program once without your mortgage interest and again with it, the amount of support you are required to pay will increase, because the computer calculates the tax benefit of the deduction and decides you will have more money left over after taxes to pay support. “But how do I pay my mortgage between now and next April 15?” you ask. The computer sits there silently blinking at you. After going through this drill with the prospective recipient of support, we begin a rather predictable exercise. First, my client will tell me, “But I can’t live on that.” This is, of course, an obviously true statement. You can’t live on it if you continue your current spending patterns. I then point out what is left for the payor and ask how a second household can be sustained on the remainder. One of two things happens at this point. Either I can tell by the stricken look on my client’s face that the message has gotten through, or she laments, “But it’s not fair … ” We’re talking reality here, not fairness. There’s a popular myth that pops up repeatedly. Quite frequently someone will ask, “But there are four of us and only one of him, so shouldn’t we get four-fifths and he get one-fifth?” Nice try. The answer is no, since in the average middle-class family, the one-fifth left over would leave the payor living in his car (if he still could afford one). Also, though some payors may not believe it, the court really does want to leave them with an incentive to go to work. When the intact family was barely getting by on the available income, the standard of living of both separated households is likely to slip, at least initially, while the finances are being sorted out. If you are fortunate enough to be at the very early stages of planning for a divorce, I strongly suggest that you minimize the nasty shocks of your first visit to your attorney by doing the following:
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