Divorce is always complicated, and a high net worth increases that complication. Assets are normally much more complex, as are revenue streams, investments, and so forth. If you are in an upper-class marriage, you probably need some clarity about how your worth will affect the divorce court’s rulings.
When there are children in the family, this can further complicate rulings. Of course, we all want to make sure our kids receive the best comfort and care, no matter what tax bracket we are in. If you are in a well-to-do marriage, you are probably not too concerned about whether your kids will be okay. More likely, you’re simply looking for answers as to how child support is calculated and whether payments will interrupt other aspects of your income.
Fortunately, in most states, there are direct formulas you can consult when calculating child support payments. Nevada is among them. Here is how Nevada calculates child support and how your net worth affects support payments.
GMI (Gross Monthly Income)
Your GMI, or “gross monthly income,” is the amount of money you make before deductions. When calculating child support payments, this is one of the first metrics a Nevada court will use.
It’s important to remember that each parent contributes to child support payments. It’s true that, pragmatically, one parent sends money to the other. That receiving parent, however, is expected to spend a portion of their income on the children, too. Furthermore, that money is not going to them. It is intended to be used on the children alone. If a parent is found spending child support money on themselves, they could face legal consequences.
When you have joint custody of the children, the GMIs of both you and your spouse are factored into child support. Nevada uses a standard formula that depends on the number of children receiving support.
- For 1 child, each parent contributes .16 of their GMI to child support.
- For 2 children, each parent contributes .22 of their GMI to child support.
- For 3 children, each parent contributes .26 of their GMI to child support.
- For 4 children, each parent contributes .28 of their GMI to child support.
- For each additional child, each parent contributes .02 of their GMI to child support.
Calculations from here are fairly simple. Subtract the lower-earning parent’s total from the higher-earning parent’s total. The amount leftover is what the higher-earning parent will pay the other in child support.
Each family is different, and therefore, each child support ruling should be tailormade to fit their needs.
Here are some examples:
- A child with special needs or chronic health issues will probably require a greater degree of support.
- If there are older children in the family, they may be able to work and help support themselves.
- If parents are far apart, visitations may require travel expenses.
- One parent may already have child support payments from another partner.
Judges may increase or decrease someone’s payments based on factors such as these.
Ultimately, what matters is your gross monthly income. In a high-net-worth family, this can complicate matters. You may have a large nest egg to sustain you but bring in very little new money from month to month. The judge will consider these matters. They can, for instance, use a larger division of assets to make sure the kids are comfortable in their primary home.
If your net worth comes from a large GMI, however, child support orders may not have a huge impact on you. It may seem as though a higher gross monthly income means a steeper payment, but the percentages generally remain the same. Anyone above the poverty line should, for example, spend around .16 of their income on child support, assuming there are no extra expenses to cover.
Any aspect of divorce can be complicated by a high net worth. If you’re concerned about your divorce or your assets, call our office at (702) 904-9898 for a free consultation. You may also schedule time with us online.