Is it Possible to Reduce a Child’s Standard of Living After a Divorce?

In many high-net-worth families across North Carolina, children become accustomed to an incredibly high standard of living. They might live in luxurious homes, engage in expensive hobbies, receive only the best medical treatment, and attend the most prestigious private schools. In the event of a divorce, however, both parents may struggle to maintain this standard of living. A lower-earning spouse might suddenly find themselves relying on child support and alimony to pay the bills, and these payments may fall short. A higher-earning spouse might also find themselves losing serious cash each month as they pay these support obligations. Is it possible for parents to intentionally lower a child’s standard of living in order to lower their own financial burdens?

Normally, family courts in North Carolina use a set formula for calculating child support. While this formula is relatively straightforward, it may not apply to families with high net worth. This is because family courts recognize that there are unique circumstances associated with these affluent families, and the normal support calculations may not make sense given the higher standard of living that children experience.

Essentially, family courts assess each high-net-worth family on a case-by-case basis while attempting to keep in mind the unique standard of living that children might have experienced during these marriages. When it comes to standards of living, there is a considerable degree of variability among high-net-worth families. For example, a family with a few million dollars in assets would likely experience a markedly different standard of living compared to a family that controls a multi-billion-dollar corporate empire. This is despite the fact that both families would be classified as “high-net-worth” according to family courts in North Carolina.

With all that said, family courts will consider certain things that do not usually factor into support calculations for lower-income families. These might include expensive extra-curricular activities, such as horseback riding, ice hockey, skiing, golf, and football. Even sports such as gymnastics can be surprisingly expensive, with some estimates pointing to a bill of about $4,000 annually per child.

Courts may also consider private school tuition, which averages about $10,000 per year in North Carolina. Another potential factor to consider is medical treatment, which many high-net-worth parents prioritize for their children. As previously noted, family courts may consider a wide range of additional factors on a case-by-case basis, including high-quality diets or regular vacations.

Generally speaking, family courts attempt to maintain the same standard of living that a child has grown accustomed to during the marriage. Under Article 1 of Chapter 50 of North Carolina’s General Statutes, the phrase “accustomed standard of living of the child” is specifically mentioned. This means that parents will need to take certain steps to maintain this standard of living, even if it no longer makes sense from a financial perspective after the economic impact of a divorce.

In some cases, however, courts will recognize that the exact standard of living is impossible to replicate. An obvious example is the loss of a family home – perhaps after parents are forced to sell the property and divide the resulting cash. Both parents may then live in separate, smaller homes – immediately confronting the children with a lower standard of living. Such situations are difficult to avoid.

That being said, parents may still be ordered to maintain the child’s access to expensive hobbies, high-quality medical treatment, and private school – to name but a few. The latter is perhaps the most important feature of a child’s life, as it provides continued access to familiar friends, teachers, and routines at school.

It is theoretically possible for parents to make mutual agreements on how child support should be handled after divorce. This may form part of a separation agreement developed during the collaborative law process. However, it is important to note that such agreements are not guaranteed to be legally enforceable, as family courts have the final say when it comes to matters related to children.

If you have been searching for an experienced divorce attorney in North Carolina, look no further than Arnold & Smith, PLLC. Over the years, we have helped spouses in the Tar Heel State with all kinds of divorce-related issues, including those involving child support. We know that providing for your children while maintaining your own financial security can seem like a delicate balance. With our help, you can work toward a viable child support plan while protecting everyone’s best interests. Book your consultation today.