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How does wealth impact child support calculations?

Child support is a complex and contentious issue. No parent wants to write a check each month in lieu of spending time with his or her child. For parents who do not have primary custody, though, this is often the sacrifice that they must make. If you are in this situation, you may be wondering how your income, assets and wealth will ultimately determine the amount of child support the court orders you to pay.

All of these factors do play a role in calculating your monthly support payments, but the system does not necessarily treat parents with a high net worth differently than any others. Still, you should be aware of the following questions when you are wondering how your income will impact child support. 

Working together for successful co-parenting

New Jersey parents who decide to divorce may face some special challenges. Because the parents are still connected through their children despite their differences and relationship problems, each parent will still need to maintain a connection with the other. Successful co-parenting is important to help the children move on from the divorce and still feel supported by both parents. When the parents are committed to working together in the interests of the children, the divorce process may be less high-conflict and the kids will feel more secure with both of their parents.

A co-parenting agreement can be an important step toward a successful future of joint child-rearing, especially as it can be finalized as part of the divorce. A family law attorney might be able to help divorcing parents to create a parenting plan that includes key decisions about who will be responsible for major parts of the child's life. It will lay out where the child will live, what the custody schedule will be and how the parents will exchange the child during parenting time. In addition, the plan can address how parents will resolve disputes and how holidays will be shared.

Tax reform could have significant divorce effects

People in New Jersey who are planning to divorce may be concerned about the tax implications of ending a marriage. The Tax Cuts and Jobs Act passed Congress and was signed into law in December 2017, but one of its most wide-ranging effects on divorce will go into effect with the new year in 2019. This aspect of the law changes the way that alimony is treated under the tax code, reversing the treatment of spousal support payments for the past 80 years.

Divorces that are finalized before the end of 2018 will not be affected by the change; people will continue to pay taxes as they always have. Because of this, many people -- especially wealthy couples with lots of assets -- have been hurrying to finalize their divorces before the end of 2018. Others are working with their lawyers to develop strategies to offset the impact of the tax reform. Historically and at present, the payor of spousal support can deduct the amount paid from his or her yearly taxes. Instead, the recipient will have to pay taxes on the income, usually as part of his or her lower tax bracket.

Dealing with business assets during a divorce

New Jersey residents who are getting divorced will discover that dividing assets can be a complex and lengthy process. This is particularly true if one or both partners own a business.

To ensure a fair division, both parties have to be aware of exactly what the business is worth. There may be a concern about balancing the valuation of the business against any child support or alimony obligations the owner may have. There may also be an issue of trust regarding whether the spouse who owns the company is being completely forthcoming about the business income.

Raising children after the divorce

For New Jersey parents who have decided to seek a divorce, it is vital to ease the transition for the children. This often involves developing a co-parenting plan for after the divorce.

Even once the child custody issues are settled and a parenting plan is drafted, there might be questions about how to proceed. Co-parenting can be challenging, but when both parents keep their children's best interests at heart, they can find success. For this, they will need to maintain open and honest communication with each other and their kids. The communication between the parents should be as tension-free as possible, and one way to achieve this is to avoid face-to-face contact. Email and text messages as well as family communication apps could all help reduce tensions. These methods also provide a written record of all communication between the parents that can be used as evidence if they ever need to go to family court.

Items you cannot include in a prenup

Prenuptial agreements have grown in popularity, particularly with millennials. A majority of divorce attorneys surveyed in one study admitted that the number of prenups they had seen in recent years had increased. 

Young people are aware of how messy divorce can be since many of them contended with parents going through the same process. A prenup can help a married couple determine who receives what assets and how much alimony one spouse will receive in the event of divorce. However, there are certain measures people cannot include.

Dealing with inherited IRAs during a divorce

Individual retirement accounts have long been an important asset and bargaining chip for divorcing spouses in New Jersey and around the country, but there are no regulations, official rulings or Internal Revenue Service guidelines dealing with how inherited IRAs should be handled during property division talks. However this has not prevented family law judges from approving divorce settlements that divide inherited IRAs, and IRA custodians, who may not wish to defy a court order, are complying with the provisions of these agreements.

This issue is likely to occur more frequently in the coming years due to changes in the way that alimony payments are taxed that go into effect in 2019. People that make alimony payments generally pay income tax at higher rates than their former husbands or wives, and the pretax funds in inherited IRAs may allow them to make up for the eliminated alimony deduction. However, this will usually involve people making a concession as inherited assets, like assets owned prior to a marriage, are generally considered separate and not part of the marital estate.

Consider the kids when creating a parenting schedule

When it comes time to develop a parenting schedule, exes in New Jersey should recognize that the process is for the children. Parents should do their best not to make it about their own conveniences. Furthermore, the process shouldn't be about getting revenge on an ex or winning a battle.

The purpose of a parenting schedule is to promote and support the child's relationships with both parents. This requires compromise. Often, parents make mistakes by overvaluing their own convenience to the detriment of the child's experience. Another mistake parents make is keeping track of the sacrifices they're making and comparing them to those of the other parent. The truth is that both parents should be sacrificing; that's a big part of raising children.

Substance abuse could affect custody decisions

Substance abuse could have a significant impact on a person's judgment. When that person is a parent, it could put his or her children in danger. There are some things a parent could do if they suspect their children's other parent has been abusing alcohol or other drugs while the kids are with him or her. If a judge has not made a custody decision, a concerned parent may raise the issue in divorce court. However, if these decisions have already been made, a report could be made with New Jersey child protective services.

Custodial and noncustodial parents may be concerned about how their former spouses' substance abuse could impact their children. Someone may learn about the issue from his or her children when they return from a visit with their other parents. It is important for people to document everything they see and hear about the other parents' substance abuse to present it to the judge or county social worker. In some cases, it might be appropriate for a person to deny the other parent visitation with their children if he or she is clearly intoxicated.

Visitation rights and child custody

New Jersey parents who have been denied custody might wonder why and whether they will be allowed visitation rights. Judges make custody decisions that are in the best interests of the child, but if a judge decides against awarding custody to one parent, that does not mean the judge thinks the child is not safe with that parent. A judge may choose to award custody to the other parent because that parent has been the child's main caregiver or as a way of minimizing disruption to a child's life.

Most of the time, courts encourage children to develop a relationship with both parents. This means that a parent who does not have custody may still have ample visitation time. As part of the child custody hearing, a visitation schedule will be created. This may include certain weeknights and weekends. It may also cover holidays and vacations.