It is sometimes said that as one’s net worth increases, so too do one’s expenses. People who have become wealthy often observe that expenses that once seemed optional — club memberships, household employees and so on — now seem mandatory.
And, yes, much of the public won’t have any sympathy when hearing these complaints. We should all be so lucky as to have problems such as these.
Still, newfound wealth can have a lot of unforeseen consequences. A case decided last year in the District Court of Appeal of Florida, Second District, centered on the question of how child support obligations changed once the paying parent came into wealth. The decision provides some insights into child support obligations for high net-worth parents.
Father becomes professional athlete
The case involved two people who had a child in 2009 but never married. They apparently split before the child was born and the father has reportedly never met his child. Still, once paternity was legally established in 2012, he began paying child support at the rate of $2,000 per month. As is usually the case, the child support amount was based on the child’s needs and the parents’ ability to pay for those needs.
Later, the father became a professional baseball player with a contract that paid him more than $2 million per year. This was considerably more money than he or the mother had ever previously made in their lives. Now that his ability to pay had changed, the parties agreed in 2016 that he should pay more. The child support amount was now set at $8,000 per month through the end of 2018, when his contract expired.
After 2018, the father signed a new contract. He was now making $9.75 million per year. In 2019, the mother requested a modification to increase the child support amount to reflect the father’s greater income. The father disputed the rise in his obligation. He noted that the mother’s income had also risen since the 2016 agreement, going from $46,000 per year to $66,700.
A trial court ruled for the father. The court found that Florida child support guidelines now supported ordering the father to pay more than $25,000 per month, but that the child’s actual needs were less than $4,000 per month. The court said it was unfair to order the father to pay so much more than the child’s needs and the mother’s contributions. It also found that the father had been overpaying, and should be credited for the excessive amount he had paid.
The appeals court reversed the trial court’s judgment. The child’s needs, the appeals court noted, are just one factor in calculating the amount of a child support obligation. In a case where one parent makes significantly more money than the custodial parent, the calculation must also take into account the paying parent’s ability to pay more. The amount should be based on the standard of living the child would enjoy if they lived with both parents, the appeals court said. It sent the case back to the lower court.
