When parents have a lot of money, it’s hard for the court to figure out how much child support should be. One way they solve this problem is by creating something called a “good fortune trust.” This trust is set up by the court when the regular child support amount is considered too much for the high-income parent. The court figures out how much the child really needs, based on the parents’ wealth, and gives that amount for day-to-day expenses. Then, the extra money goes into the good fortune trust, which the child can use after they turn 18. This way, the child gets the same financial support they would have received if the parents were still together. Child support guidelines aim to provide a child with the same standard of living they would have had if their parents stayed married. For high-income parents, child support should include things like paying off the family home, saving money, and setting up trusts for the children. In a case called Boyt v. Romanow, a court ordered the father to put extra money into a “good fortune trust” for the child’s future expenses, on top of regular child support. This was upheld by an appeals court. However, in Finley v. Scott, a similar decision was reversed by an appeals court, saying that the father did not have to put extra money into a trust for the child. The court should only consider a parent’s high income when determining the standard of living the child should have. They should only use the parent’s income to influence the level of support for the child. A trust fund may be a good solution to benefit the child in the future and give them a higher standard of living now. This is similar to what some families do when they open savings accounts for their kids and add money to them over time for future needs like healthcare or college. Support for the child should include not just day-to-day expenses, but also giving the child money from the parent. The Florida Supreme Court approved the creation of a good fortune trust for a child, agreeing with the need for extra financial support given the overall financial circumstances of the parents. In another case, a court ordered child support for a professional athlete based on his current salary, considering that his future earnings would likely decrease. Part of the support was to be set aside in a trust fund for the child’s future educational needs. In a court case involving a professional NFL punter, the court ordered child support based on the father’s income, and also set up a trust fund for the child’s future educational expenses. This was deemed fair because the father’s income could decrease after his football career. Another state’s child support guidelines also allow for the establishment of trust funds when the parent’s income exceeds a certain amount. In Nash v. Mulle, the court ordered a father to pay a certain amount of child support each month, with some of the money reserved for a trust fund for the child’s college education. The Tennessee Supreme Court said this was okay because the child should be able to benefit from the parent’s high standard of living, and the support payments can be used even after the child turns 18. But in other cases, like In re Marriage of Sewell and Stringer v. Brandt, courts said they couldn’t order support for things like trust funds because it wasn’t allowed under their state’s child support guidelines. In a recent case, a father’s income increased a lot, but the court didn’t make him create a trust for his child, even though his other kids had one. The court said it would be too intrusive in the father’s finances, but it seems like the child should have the same standard of living as the father’s other kids. In a recent case in Ohio, a court ruled that a father couldn’t create a trust fund for his child as part of child support, even though he could do so in another state. This shows how child support laws can be different in different states. It’s time for the laws themselves to address this issue. Laura W. Morgan is a lawyer who specializes in family law and child support. She is currently the chair of the Child Support Committee of the American Bar Association. She has written a book on child support guidelines and is the editor of a family law magazine. This article is written on behalf of the General Practice, Solo and Small Firm Section.
Source: https://www.floridabar.org/the-florida-bar-journal/child-support-and-the-high-income-parent-uses-and-misuses-of-the-good-fortune-trust/
Leave a Reply