A little over four years ago I shared information regarding clients and their struggle over child support (See: How Divorce Mediation Can Create a Sensible workable Child Support Agreement).  This issue is so important for parents that I want to revisit it again with an example from different clients.

Henry and Jane (not real names) had a financial situation that was certainly close to middle class in the twenty-first century.  With a small amount of overtime his gross income was close to $100,000.  Jane’s income was a little over $40,000.  They had two teenage children, a house with a low mortgage, and no other large debts. They had day-to-day expenses: a car payment, home heating, DirectTV, cell phones and extra-curricular expenses for their children.  All of this was manageable with a gross income of over $140,000 per year.  In addition, Henry had a 401K account worth over $400,000 and a pension account valued at around $200,000.  Then, the couple decided to divorce.

If they retained lawyers, each would have been responsible for an initial retainer of some $4,000 (in New York’s capital district).  Once that retainer was exhausted, they would each be responsible for their respective lawyer’s hourly rates, conservatively $375.  If the lawyers were unable to reach a settlement agreement, the parties would end up in court where a judge would impose the child support calculations based on New York State’s formula imposed for two minor children.

Let’s examine what that would mean.  New York’s CSSA (Child Support Standards Act) imposes a calculation of twenty-five percent (25%) of the parties’ gross adjusted incomes.  In this case that would mean an annual child support of over $30,000!  The father’s share as the non-custodial parent would be approximately $20,000.  Parents want to do the best they can for their children but $20,000 from the father and another $10,000 from the mother is much more than needed for the children to continue in the lifestyle they had prior to the divorce, considering that they attended public school and daycare was not an issue.

There is a more rational alternative than a court-imposed settlement that presents a financial burden on both parents.  That alternative is mediation.  Mediation empowers the couple to make their own decisions and to adjust and deviate from the Child Support Standards Act calculations.  There is also an opportunity to deviate and adjust the equitable distribution involved in the husband’s 401K and pension.

Give us an opportunity to help you create an agreement that accommodates your needs and the needs of your children without causing significant financial harm to one or both parents.  Give us a call at 518-762-4795.

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Let Jerry know if you would like to learn more about divorce mediation.