Because Alabama, like its sister states, has a set of Child Support Guidelines, many Birmingham couples who are going through a divorce or other family law matter will find child support to be a relatively straightforward issue.
While it is not always the case, the parents will frequently be responsible for the amount of child support that Alabama’s Guidelines specify.
For high-earners, though, the Child Support Guidelines might not resolve all of their issues so easily. Those households in the greater Birmingham area who enjoy high income may find that they will need help working through the legal details that will ultimately decide how much child support they will pay or receive.
The Guidelines only account for household incomes of up to $30,000 a month, or $360,000 a year.
While this might seem like a lot to many families, a home where both parents are doctors could exceed this threshold. Likewise, a successful businessperson in the area could bring in well over $360,000 a year.
Alabama judges have considerable discretion when deciding on child support amounts above and beyond what the Guidelines contemplate.
On a related point, many high-earning couples also have their children enrolled in additional or high-quality educational opportunities. There may be disagreements about which parent should be responsible for what share of these expenses, as courts can consider them when issuing a child support order.
In high-earning families, getting a full picture of each parent’s income can be difficult
High-earners also frequently draw their income from sources other than a job with a regular paycheck.
For example, they may draw income from their investments, gifts and other support from family members and the sale of property. Moreover, a parent may have to include certain benefits they receive from their job, like a company car for example.
These all can count as a parent’s income for child support purposes, but it could take some investigation to get a full picture of these sources of income.
Likewise, if a parent draws income from their business, there will likely have to be a careful review of the business’s records.
A tax return is not reliable in this situation. For one, not all tax deductions—accelerated depreciation for example— factor into the court’s child support calculation.
Child support calculations are more complicated for high-earners, and these parents may be well-served to understand the process and their legal options before making any important decisions.