Child Support in High Income Families and Accustomed Standard of Living
Bishop v. Bishop, ____ N.C. App. _____ (Dec. 2020)
Child support in North Carolina is typically determined by a formula set out by the legislature and applied in child support guidelines and their worksheets. However, it was known for some income levels that the formula no longer becomes equitable. Too low or too high of income both throw a wrench into the calculus. For higher income families, the court may forgo the use of the guidelines and make findings on the reasonable needs of the child when compared to a parent’s ability to pay; meaning it should account for their assets, debts, and lifestyle.
- Facts: Father was ordered in 2012 to pay mother $2064.00 per month in child support. At the time, Father’s income was found to be in excess of $30,000.00 per month. In 2017, Mother filed a motion to modify based on increased needs of the child. In 2018, the trial court ordered that Father’s child support be increased to $3,289.00 per month. At the time, Father’s income was found to be $44,846.00 per month. Father appealed.
- Issue: Did the trial err in calculating the reasonable needs of the child?
- Holding: Majority no; one dissent.
- Rationale: Father’s arguments primarily rely on the findings of fact that concern the parties’ income, assets, debts, and lifestyle. Father argues for a strict application of math to the income disparity. However, the Court rejected this notion. Our statute allows for the consideration of the estates, income, debts, conditions, and accustomed standard of living; i.e., a parent’s ability to give the children the advantages in life related to higher income. To that end, the trial court properly considered that:
– Mother would require a new vehicle to transport the child whereas Father recently purchased two new vehicles.
– Mother’s vacations with the child were typically confined to in-state whereas Father would fly across the country on more extravagant escapades with the child.
– Mother had multiple credit card debts whereas Father had barely any.
– Mother’s standard of living for herself and child are significantly lower than what the family enjoyed when together and lower than Father’s.
– Father has long-term assets such as a brokerage account.
– Father’s new wife is a housewife in a new $1.2 million home.
– Father has no credit card debt because he is able to pay the monthly $15-35,000 incurred charges at the end of the cycle.
– Father frequently is able to afford luxuries in this time period.
Based on those considerations, the trial court did not abuse their discretion when determining that the needs of the child have increased since the 2012 order.
- Lessons and Observations:
- The majority opinion lists some of the “standard of living” findings that the court may consider when determining a high-income parent’s child support. I believe the key to their reasoning is very much removed from the numbers alone; they use those facts to support the holding that the conditions of life between the parties are so disparate that it was fundamentally inequitable. The award seems to consider that the child should have opportunity to live in at least a remotely similar condition with Mother as compared to Father. Imagine having to move from a modest lifestyle with Mother to an exquisite one with Father. Emotions and feelings of the child around this disparity were at play in this outcome.
- The dissent notes that child support is not spousal support. The fact that some of these expenses could invariably increase the standard of living of Mother may be too far a stretch in the child support arena, and the argument is better saved for alimony. A new car and increased vacation funds are means to “create emotional equality” and not to provide for a child’s reasonable needs. Furthermore, they state that the award was based in part on unsubstantiated future expenses (new car).
- The majority opinion focuses on increasing equality between parents’ standard of living, and the dissent focuses on consistent application. It may be up to our Supreme Court to interpret.