CALCULATING ALIMONY AND CHILD SUPPORT–PRACTICALLY
EXPERT CONTRIBUTOR
Contributed by Donahue Hagan Klein & Weisberg, LLC
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Step 3
hen offering assistance and potential solutions with respect to the calculation of alimony and child support, it is important to consider ranges of fairness, recognizing that there are no right answers and that there are many variables to consider. As well, strategies may differ depending on whether one is mediating or litigating. As an example, at Donahue Hagan Klein & Weisberg, LLC, Stephanie Frangos Hagan (a Summit resident), who devotes a significant amount of her practice to litigation, would seek to find a solution that is best for her client. Whereas Phyllis S. Klein (a Chatham resident), who devotes over 90% of her practice to mediation, would seek to find a solution that is most reasonable to both parties. Regardless, the analysis includes four essential steps. Step 1 Determine each party’s individual after tax income, which would include consideration of earned and unearned income, deductions, and tax filing status. Step 2 Compare both incomes to determine the disparity between both parties’ incomes.
WHERE FAMILIES ARE FIRST Families matter to the attorneys at DHKW, who recognize that family law cases require sensitivity and financial sophistication. DHKW provides both support for the emotional and psychological impact of divorce and the expertise to plan for their clients’ financial wellbeing. DHKW has vast experience in negotiating, mediating, arbitrating, and litigating cases involving divorce, custody, parenting time, alimony, division of assets, and liabilities, as well as domestic violence and appeals. The firm’s partners include former and current chairs of the Essex and Morris County Bar Associations’ family law committees, a former Morris County Bar Association president and Morris County Bar Foundation president, and a current officer of the New Jersey State Bar Association’s Family Law Executive committee and the Morris County Bar Association. Three of the firm’s partners are New Jersey court-approved mediators and three are AAML-certified family law arbitrators. Phyllis S. Klein, Esq. and Stephanie Frangos Hagan, Esq. Donahue, Hagan, Klein & Weisberg, LLC 44 Whippany Road Morristown, New Jersey 07960 (973) 467-5556 pklein@dhkwlaw.com and shagan@dhkwlaw.com www.dhkwlaw.com
Consider and determine possible alimony and child support figures in consideration of the after-tax income of each party and by applying the factors required under the New Jersey alimony and child support statute (N.J.S.A.2A:34-23(a) and N.J.S.A.2A:34-23(b)). We commonly start with five factors that would be least unique to any matter – (1) duration of the marriage, (2) ages of the parties, (3) ages of the children, (4) the custody arrangement and (5) budgets. However, we must also consider additional statutory factors, such as reasonable future needs, health of the parties, special needs of the parents and/ or the children, caregiving responsibilities and earning capacity beyond actual earnings. Step 4 Subtract the alimony and child support from the payor’s aftertax income, while simultaneously adding that same amount into the recipient’s after-tax income, to determine each party’s resulting after-tax cash flow, and compare them. The following is a mathematical example of one such analysis:
Facts: Duration of Marriage Ages of Parties Kids Ages Custody of Kids
Step 1
12 years 55/40 9/7 50/50 Husband
Wife
Gross Income
$550,000
$200,000
Total Taxes
(211,938 )
(55,864)
After-Tax Cash Flow
338,062
144,136
Percentage to the Total Cash Flow
70.01%
29.9%
Step 2
Disparity
Step 3
Alimony
(64,000)
64,000
Cash Flow After Alimony
274,062
208,136
Percentage to the Total of Cash Flow After Alimony
56.8%
43.2%
Step 3
Child Support
(18,000)
$18,000
Step 4
Cash Flow After Alimony and Child Support
$256,062
$226,136
Percentage to the Total Cash Flow After Alimony and Child Support
53.1%
46.9%
$193,296
At Donahue, Hagan, Klein, & Weisberg, LLC, we competently navigate our clients through this process. For further information, please contact either Stephanie Frangos Hagan at shagan@dhkwlaw.com or Phyllis S. Klein at pklein@dhkwlaw.comor call at (973) 467-5556 or visit our website at www.dhkwlaw.com. January 2020 | 23
