Navigating Child Support in a High-Net-Worth California Divorce

Many divorces deal with the same issues, such as child support, child custody, and the precise division of various assets or debts. However, when you are talking about a high-net-worth divorce, these issues become far more complicated and more difficult to navigate. High-net-worth individuals often deal with a complex set of assets such as businesses, franchises, real estate, inheritances, stock portfolios, etc. This makes some processes that simplify a regular divorce more complicated. However complex a high-asset divorce may be, it is achievable. The better you understand and can anticipate key components of a high-net-worth divorce, the better you can set your own expectations and maneuver yourself into the best possible position moving forward.

Prenuptial Agreements and Child Support

If you think you do not have anything to worry about because your prenuptial agreement has pre-set the terms for child support payments in the case of future divorce – do not be lulled into a false sense of security. While you very well may have a prenuptial agreement, California law does not allow child support terms to be set in a prenuptial agreement. This means that any such terms will be unenforceable and invalid (you may also consider having your prenuptial agreement reviewed by experienced legal counsel to identify any other potential invalid terms and/or to assess the validity of the prenuptial agreement as a whole.)

Child Support Determinations

But wait – some savvy readers may already be familiar enough with California law to know that the courts utilize a formula to determine child support. The calculation of appropriate support to be paid should be simple then, right?

Well, not entirely.

While it is true that the California courts have a formula to determine appropriate child support, in high-net-worth divorces there are simply additional considerations that have to be made. Assessing a high-net-worth individual’s responsibility for support payments has to look different than the assessment of an average citizen because a high-net-worth individual has access to monies in forms and categories generally not present in a regular divorce case.

Income for support purposes

A high net worth divorce may involve individuals with income received from various categories, especially if someone is self-employed, operates their own business, accesses capital gains income, income generated from investment, etc. If the California courts did not take these items into account, the child support calculation could end up looking unjust. 

Because there are many different ways that a high net worth individual might receive an income, individuals facing a high net worth divorce should expect a child support ruling that takes into account not only an individual’s base income or salary but also the individual’s other income streams.

“Base” income

A base income operates similarly to a salary. If, for example, a person operates a business, they will likely have a “base” income. This is a set amount of money paid out at regular intervals regardless of whatever fluctuations in profit the business might see. 

An average person, such as a public school teacher, may only have their salary to be analyzed as the basis for determining child support obligations. However, analyzing a high-net-worth individual’s base income or salary alone could lead to very unjust results. A high-net-worth individual’s base income is likely not reflective of their net worth. For example, Jeff Bezos, one of the wealthiest men who has ever lived, receives a base income of $81,840 dollars a year. At the same time, reportedly, Mr. Bezos actually made over 7.9 million an hour, every hour, in 2023.

Contact the Law Office of Bradley S. Sandler

The elite, experienced high-net-worth divorce attorney at the Law Office of Bradley S. Sandler understands the nuance and complexity inherent in high-asset divorces. Contact our office today to learn how our expert team can help you navigate through the intricacies of your own case.