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CHILD SUPPORT GUIDELINES AND HIGH INCOME PARENTS

Laura W. Morgan

The law of child support went through no less than a revolution in 1988, when Congress enacted the Family Support Act, Pub. L. 100-485, 102 Stat. 2343 (codified primarily at 42 U.S.C. §§ 666, 667). This Act required each state, as a condition of receipt of federal funds for child support enforcement services, to enact mandatory presumptive child support guidelines:

There shall be a rebuttable presumption, in any judicial or administrative proceeding for the award of child support, that the amount of the award which would result from the application of such guidelines is the correct amount of child support to be awarded. A written finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate in a particular case, as determined under criteria established by the State, shall be sufficient to rebut the presumption in that case.

42 U.S.C. § 667(b)(2). Accord 45 C.F.R. § 302.56. Thus, in any judicial proceeding for support, whether an initial determination of child support or a modification of support, the state must apply its child support guidelines as the presumptively correct amount of support to be awarded. A deviation from the state’s guidelines can only be supported by a written finding or a finding on the record that the presumptively correct amount of support, as determined by the guidelines, is unjust or inappropriate in the particular case. No longer may child support be predicated on the amorphous and ever-changing “best interests of the child” standard. Rather, the best interests of the child are presumed in the child support guidelines. See generally Laura W. Morgan, Child Support Guidelines: Interpretation and Application § 1.02 (1996 & Supp. 1997).

Every state has recognized that the case of the extremely high-income parent presents special concerns. See Laura W. Morgan, Child Support and the Anomalous Cases of the High-Income and Low-Income Parent: The Need to Reconsider What Constitutes Support in the American and Canadian Child Support Guideline Models, 13 Can. J. Fam. Law 161 (1996); Carlton D. Stansbury, Deviating From Child Support Percentages in High-Income Cases,” in 1997 Wiley Family Law Update (1997). Consequently, in every state, the courts have focused on the reasonable needs of the child as the single guiding star in determining child support. Otherwise, the guidelines may yield an amount of support that is simply excessive. Laura W. Morgan, Child Support Guidelines: Interpretation and Application § 4.07[b] at 4-41 (1996). Indeed,

[w]hen a parent has an ability to pay a large amount of support, the determination of a child’s needs can be generous, but all any parent should be required to pay, regardless of his or her ability, is a fair share of the amount actually necessary to maintain the child in a reasonable standard of living.

Kalter v. Kalter, 155 Mich. App. 99, 399 N.W.2d 455, 458 (1986).

In reaching the conclusion that the reasonable needs of the child must govern the child support determination in high income cases, the court have stated that child support in excess of a child’s reasonable needs cannot stand for three reasons: (1) such support constitutes the distribution of the obligor parent’s estate; (2) such support provides an inappropriate windfall to the child; (3) such support may also infringe upon a parent’s right to direct the lifestyle of his or her children. See Laura W. Morgan, Child Support Guidelines: Interpretation and Application § 4.07[b][2]; Carlton D. Stansbury, “Deviating from Child Support Percentages in High-Income Cases,” § 1.7, in 1997 Wiley Family Law Update (1997).

Substantial case law demonstrates each of these arguments against what the courts term “excessive child support.” First, the courts have held that excessive child support is a disguised distribution of the obligor’s estate. This was explained in Ford v. Ford, 600 A.2d 25, 30 (Del. 1991):

When the income of an individual is substantial, he or she will use a smaller percentage of that income to maintain a certain standard of living as compared to an individual with less income. This is because, outside the unusually extravagant lifestyles, only a limited sum can be spent on a standard of living. At some point income is directed less and less towards “needs” and more and more towards savings or investments and thus becomes part of an individual’s estate. The Delaware Child Support Statute certainly contemplates that children share in their parents’ standard of living, even a somewhat luxurious standard of living. . . . But it does not direct or authorize the Family Court to distribute a parent’s estate. The Family Court has no duty or authority to order payments which go beyond the demands of reasonable and generous support, meaning, in this context, enough to share in the respective lifestyles of the parents.

Thus, support that goes beyond the reasonable needs of a child is no longer “support,” but is a distribution of the obligor parent’s estate. Accord Anonymous v. Anonymous, 617 So. 2d 694 (Ala. Civ. App. 1993) (child support in excess of $6,000 per month was disguised distribution of obligor’s estate); Richardson v. Richardson, 8 Haw. App. 446, 808 P.2d 1279 (1991); Heins v. Heins, 783 S.W.2d 481 (Mo. Ct. App. 1990) (child support is not to provide for the accumulation of capital by children, but is to provide for their reasonable needs).

Second, a court should not award child support that is in excess of the child’s reasonable needs, even where those needs are commensurate with a high standard of living, because this would provide an inappropriate windfall to the child. The case of Stringer v. Stringer, 123 Or. App. 502, 877 P.2d 100 (1994), makes this point. In that case, the father had a gross income of $39,000 per month. The testimony showed, however, that the child’s needs were only $588 per month. The court refused to award support in excess of the child’s reasonable needs, holding that an award in the case of a high-income parent must, at a minimum, be based primarily on the child’s needs, as set out in specific supporting findings. Accord In re Marriage of Inwegen, 757 P.2d 1118 (Colo. Ct. App. 1988); In re Marriage of Harmon, 210 Ill. App. 3d 92, 568 N.E.2d 948 (1991); Hubert v. Hubert, 159 Wis. 2d 803, 465 N.W.2d 252 (Ct. App.), cert. denied, 163 Wis. 2d 517, 471 N.W.2d 615 (1991). In essence, these courts have stated that the purposes of the child support guidelines are to remedy a shortfall in awards that do not reflect the cost of raising children, to improve consistency and equity in awards, and to improve the efficiency of the court system in the matter of child support. Child support awards should not provide a windfall to the child. In re Marriage of Lee, 246 Ill. App. 3d 628, 615 N.E.2d 1314 (1993) (although application of the statutory percentage would yield support in the amount of $5,430 per month, support was limited to $3,000 per month based on stated child’s needs); In re Marriage of Partney, 212 Ill. App. 3d 586, 571 N.E.2d 266 (1991) (court’s award of guideline percentage in high-income case was abuse of discretion where it exceeded child’s reasonable needs); In re Marriage of Scafuri, 203 Ill. App. 3d 385, 561 N.E.2d 402 (1990) (abuse of discretion to award guideline amount of $10,000 per month, where lifestyle to which children were accustomed could be adequately maintained at $6,000 per month); Colley v. Colley, 200 A.D.2d 839, 606 N.Y.S.2d 796 (1994) (blind application of guidelines without any finding as to need constitutes abdication of judicial function); Chasin v. Chasin, 182 A.D.2d 862, 582 N.Y.S.2d 512 (1992) (court must consider needs of children in determining amount of support warranted); Nash v. Mulle, 846 S.W.2d 803 (Tenn. Ct. App. 1993) (21% of an enormous monthly income may provide far more money than most reasonable, wealthy parents would allot for the support of one child); Rodriguez v. Rodriguez, 834 S.W.2d 369 (Tex. Ct. App. 1992) (award of support above child’s reasonable needs and solely because the obligor has great income would amount to de facto alimony).

Third, child support in excess of the child’s actual needs may afford the child a lifestyle the obligor parent does not wish the child to enjoy. This was stated in Harmon v. Harmon, 173 A.D.2d 98, 578 N.Y.S.2d 897 (1992). In Harmon, the court considered New York’s child support guidelines that apply a statutory percentage when the parties’ income exceeds a particular amount. The trial court calculated the amount of support due, but failed to consider that the husband was paying 75% of the oldest child’s tuition and 100% of his medical expenses, and failed to consider the child’s reasonable needs. The appellate court reversed:

Indeed, to apply blindly the statutory formula to the parties’ aggregate income over $80,000 without any express findings or record evidence of the child’s actual needs would constitute both an abdication of the judicial responsibility and a trespass upon the right of parents to make lifestyle choices for their children. Although entitled to support in accordance with the pre-separation standard, a child is not a partner in the marital relationship, entitled to a “piece of the action.”

. . . Accordingly, the matter should be remanded to take evidence on the appropriate amount of child support in accordance with the [guidelines] and to calculate the obligations of the parties in accordance therewith.

578 N.Y.S.2d at 904. Thus, a court must give consideration to the monetary contributions of the parties and the actual needs of the children. Anything less constitutes judicial abdication of the court’s responsibility to consider exceptional circumstances when presented in cases of high income.

Where the parents have extraordinarily high income, the cases have all referred to the child’s reasonable needs as the polestar for determining child support. What a child’s “reasonable needs” are, of course, depends largely on the standard of living at which the child is entitled to live.

Branch v. Jackson, 629 Pa. Super. 417, 629 A.2d 170 (1993), is a typical case discussing the proper standard of living for a child of high-income parents. In that case, the father, Michael Jackson Jr., was a major league baseball player netting $75,000 per month. The father stipulated that due to his large monthly income he could pay any order the court might enter. The court determined that the child, as the child of a wealthy major league player, was entitled to a lifestyle commensurate with his parents’ wealth. Quoting from a prior Pennsylvania case, the court stated:

. . . “necessaries,” and “luxuries” are relative matters. . . .

Children of wealthy parents are entitled to the educational advantages of travel, private lessons in music, drama, swimming, horseback riding, and other activities in which they show interest and ability. They are entitled to the best medical care, good clothes, and familiarity with good restaurants, good hotels, good shows, and good camps. It is possible that a child with nothing more than a house to shelter him, a coat to keep him warm and sufficient food to keep him healthy will be happier and more successful than a child who has all the “advantages,” but most parents strive and sacrifice to give their children “advantages” which cost money.

A wealthy father has a legal duty to give his children the “advantages” which his financial status indicates to be reasonable. . . .

[A parent] should not be forced by a support order to make personal sacrifices to give them all the advantages to which we referred above, but a father with the assets, the youth, and the ability of the defendant can furnish his children with these advantages without any recognizable sacrifice on his part.

629 A.2d at 171.

In sum, case law from around the nation shows that in the present case, the court must base the child support award on the reasonable needs of the child, albeit the reasonable needs of a child of affluence.

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