Child support and spousal support have features in common, but there are important distinctions. They have significantly different tax consequences for the parties, and they differ in the way the court approaches each type of support.
As in spousal support, parents can agree on child support, but, in the absence of an agreement, the court makes the decision. The two forms of support diverge, however, when it comes time for the court to determine appropriate levels of support.
For temporary spousal support, granted while the case is ongoing, the court applies a formula in accordance with local court rules. In San Mateo County, the temporary spousal support formula is computed by taking 40% of the payor’s net income minus 50% of the payee’s net income, adjusted for tax consequences. When the case ends and the judge enters an order for “permanent” support, the court is charged with considering a litany of factors set forth in Section 4320 of the California Family Code.
Those factors include the parties’ standard of living while married, their age and health, their ability to pay, their assets and debts, the length of the marriage, the possibility of tax consequences to a party and the question of whether the supported party could “engage in gainful employment without unduly interfering with the interest of dependent children in the custody of that party.”
When setting permanent spousal support, the court must base its decision on the standard of living achieved during the marriage, commonly referred to as the marital standard of living, weighed along with the other applicable Section 4320 factors. The marital standard of living generally serves as the benchmark for the amount of support, and is sometimes referred to as a support “ceiling.” This means that even if the payor has the ability to pay spousal support that allows the payee to live at a higher standard of living post-separation, the court retains broad discretion to not order it. Section 4320’s purpose is to maintain the marital standard of living, where possible, and not an increased post-separation standard of living. The marital standard of living has the greatest significance in high net-worth cases where it is more often the case that the marital standard of living can be maintained post-separation in two separate households. The court recognizes, however, that it is frequently the case that the payor does not have the ability to maintain two households post-separation at the marital standard of living – the court knows that it costs more to maintain two houses than one. In these cases, while still relevant, the marital standard of living may have less significance. The question of how to determine the marital standard of living is a complicated one, and one for which the court has broad discretion.
It should be clear that the relevant statute provides a standard that is far from objective. In fact, it goes so far as to instruct the judge to consider “any other factors the court determines are just and equitable.” In other words, the court is given broad scope.
Calculating the amount of child support is a more formulaic exercise than the calculation of spousal support, with statewide guidelines in place to control judicial determinations. Once those guidelines are applied, the result is presumed to be correct. That presumption is rebuttable, however, and while a judge can only depart from the guidelines in limited situations, the law does give the parties an opportunity to show, for example, that “the application of the formula would be unjust or inappropriate in the particular case.”
Determinations of spousal and child support can have serious long-term consequences, both personal and financial, for litigants. Representation by a family law attorney with experience in this area is recommended. In complex cases, it may be necessary to enlist the services of a forensic accountant. The attorneys at Seeley Family Law Practice will help you determine the amounts of child and spousal support that are appropriate in your case. In complex cases, we will work with forensic accountants to determine the income available for support and tax consequences of particular support arrangements and we may also hire vocational examiners if earning capacity is at issue.