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Child Support Caps for the Wealthy – UPDATED

January 23, 2012

For those who’s net monthly resources are $8,550 or more, you may be able to enjoy a cap on child support. The term “net resources” is a complicated legal term that generally amounts to all resources less certain deductions such as federal taxes and social security but not 401(k) contributions. There are of course various exceptions not discussed here.

The cap or more specifically, the “presumptinve amount” of child support, was $7,500 until 2013 when it was changed to $8,550. It essentially means the obligor’s child support will be based upon the first $8,550 of monthly net resources. For example, if you have one child living in one household, child support will be 20% of the first $8,550 in monthly net resources. In other words, if the obligor earns a million dollars per year, child support would not be 20% of a million dollars but rather 20% of the first $8,550.

Millionaires and billionaires, don’t get too excited. The presumptive amount is not an absolute. The court may order additional child support over the presumptive amount if it would be in the best interest of the child. Being presumptive in nature means it can be overcome with evidence that the child has needs for a nanny, travel, tutor, bodyguard and so on. The best interests of the child may not be only served with food and shelter. In any case, determining the best interest of the child is a highly subjective standard and can be difficult to prove and disprove.

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