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Child Support

The Huffington Post just reported that model Linda Evangelista has requested a New York court to award her $46,000 a month in child support, even though she is worth $8,000,000.00. Some same the figure is extreme and others justify it with her need for a nanny and personal driver for her daughter. As in California, the figure is someone based upon the father’s $5.2 million base-income from last year. California Family Code states that BOTH parents are obligated to support their child “in the manner suitable to the child’s circumstances.” The Courts use a “statewide uniform child support guideline” formula which allows the judge or commissioner to input several numbers (primarily income and custodial timeshare) and in return the program spits out the “support amount” to be paid. The formula used by the Court does not take into account how much money one parent will have left over or whether that parent will be able to pay the remainder of his/her bills. The formula does not take into account the “new spouse’s” additional income if one of the parents is remarried, either. Under specific circumstances, based on the ability and opportunity to work, the Court may impute income to one or the other parent, even if they are not working. The Court recognizes Family Code § 4053 which states that, “A parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life.” “Each parent should pay for the support of the children according to his or her ability.” “Children should share in the standard of living of both...

Financial Preplanning for Divorce

The financial impact of a divorce may be greater than most of us expect. If you have been the “stay at home” parent, you may find yourself without income and may need a support order to sustain life. You may be coming to the realization that one-half of your worth with be gone; overnight. However, with some planning, you can minimize the impact if you think about your finances prior to moving towards a divorce. 1. Do some planning. It is important to know how a divorce will impact your financial goals. Establish which items may be lost and need to be replaced, therefore having an effect on your immediate cash flow. Have an understanding of where your new financial obligations may be, with regard to potential support orders. Understand future expenses, if your children are young, including school tuition, car insurance, or other large purchases, so as not to be caught off guard as time moves forward. 2. Realize that not all assets are created equal. During the course of a divorce, it is important to realize that assets have financial value and emotional value. Although sentimental value items are important, they will not pay the bills. If your wealth is sufficient that the division of property does not demand your concerns over real value, then this may not be a problem. It may be tempting to fight for the residence, but the fact that the asset requires a mortgage payment that is considerably more than you can maintain would be detrimental in the long run. Assets, such as retirement plans which are tax-deferred, are an asset worth...