High-net-worth divorces, typically defined as households with liquid assets exceeding $1 million, face a unique set of financial challenges.

For starters, they have more assets, properties, and complex business holdings on the family balance sheet—and the more holdings, the more there is to divide. While every New Jersey divorce requires an equitable distribution of assets, the math is just a little more complicated for high-net-worth couples.

Child support is no different. Below are some frequently asked questions about child support and how it is calculated for high-net-worth couples divorcing in New Jersey.

How is child support determined in New Jersey?

In New Jersey, child support payments are determined by the NJ Child Support Guidelines for families with a combined after-tax income of between $8,840 per year and $187,200 per year. When incomes fall outside of this range, the guidelines no longer apply. These scenarios require creative solutions, because there is no governing structure to guide the process. Families are expected to figure it out on their own, or let a judge decide.

Does the court have to be involved in child support disputes?

Not necessarily. Child support can be determined through mediation or negotiation, which are often preferable to litigation. These alternative methods give parents more flexibility, privacy, and control over the decision-making process (rather than risking the opinion of a judge).

How do the courts determine child support for couples who fall outside the NJ guidelines?

The court is prohibited from extrapolating the NJ Child Support Guidelines, which means judges are not supposed to apply the guidelines to cases that don’t fit the criteria. However, families trying to negotiate outside of court will often start with a Guidelines analysis as an unofficial starting point, then adjust the payment amount based on the child’s needs.

After reviewing the Case Information Statements, both parties will examine how money is allocated within the family. In other words, who is currently paying for what? If both parties can’t agree on what money is going where, they might have to hire a forensic accountant to conduct a “lifestyle analysis,” which will show how the family has spent money in the past.

Child support is determined more by lifestyle and income than assets. For example, let’s say you have two families:

Family A: Has income above the NJ Child Support Guidelines, $3 million in assets, a $700,000 house, lives a relatively frugal lifestyle, and takes one annual family vacation

Family B: Has income above the NJ Child Support Guidelines, $3 million in assets, a $1.5 million house, buys new clothes for the child every season, and takes four family vacations each year, which include first class plane tickets and five-star hotels

Even though both families have the same total assets, Family B could have a higher child support payment than Family A.

What if my child is attending college?

College tuition is not considered a need equivalent to food or shelter, but New Jersey family courts do generally expect parents to contribute toward a child’s college education. A judge will determine who pays what college costs based on a number of factors, including a set of 12 criteria established in the landmark Newburgh v. Arrigo case.

Families negotiating outside of court will often start with a Guidelines analysis as an unofficial starting point, then adjust the payment amount based on the child’s needs, lifestyle, and current financial dynamic within the family.

Parents need to consider the child’s cost of living already provided through room, board, and tuition. Does the child have a job? Are parents still paying for the child’s clothes, cell phone, food, and other expenses associated with recreational activities?

Cost of living can also vary widely based on the location of the college campus. It would take more money to support a child attending school in Manhattan than it would to support a child attending school in central Pennsylvania.

Find a Lawyer in Morris County and Bergen County for High Net Worth Divorce

Without the structure of the New Jersey Child Support Guidelines, determining child support payments can be subjective—and therefore unpredictable. The family lawyers at Arons & Solomon can help you create a divorce settlement that will protect your personal wealth and the best interests of your children.

Our services include:

  • Demanding full financial disclosure from opposing parties
  • Disputes over individual vs. marital property
  • Working with financial experts to analyze financial records and identify assets, including: retirement accounts, investments, real estate, business ownership interests and other high-value property subject to equitable distribution
  • Scheduling appraisals for high-value possessions
  • Collaborating with forensic accountants and private investigators to expose the truth regarding hidden assets, employability, and business valuations
  • Generating creative options for settlement
  • Referrals to Certified Financial Planners® (CFP) to achieve long-term financial security