High Income Parents & Child Support Guidelines
Thank you, Brenden Woodruff for letting us share this.
An analysis of Tennessee child support appellate opinions discussing deviations for high-income parents by Brendan Woodruff, Summer Law Clerk
July 12, 2023
Upward Deviation Upheld
Stack v. Stack, No. M2014-02439-COA-R3-CV, 2016 WL 4186839 (Tenn. Ct. App. Aug. 4, 2016)
Tennessee Family Law Blog: https://memphisdivorce.com/tennessee-child-support-laws/income-determination-tennessee-child-support-laws/withdrawals-principal-trust-count-income-purposes-tn-child-support/
Mother and Father were divorced in Montana in 2012. The couple had one child, less than a year old, at the time their marriage ended. At the time of the divorce, Father was living off income from his investment portfolio and as the beneficiary of a trust established by his wealthy family. Between 2011 and 2013, he earned an average of $10,900 taxable income per month from his investment and received multiple trust disbursements exceeding $100,000 which were not included in his taxable income. Mother became a certified aesthetician after the divorce but had difficulty finding work in Tennessee and thus worked part time as a equestrian riding instructor. Between her part time employment and investments, she earned $41,380 in income in 2013.
Under the couple’s initial divorce settlement agreement, Father received no parenting time and agreed to pay $2,600 in child support, an amount in line with Montana’s child support guidelines. Father had the option to petition for parenting time should he decide to have a relationship with the child. After the Montana court entered its final divorce order, Mother moved to Williamson County, Tennessee with the couple’s child. She filed a petition to register the Montana divorce order with the Tennessee chancery court in November 2013, which the court granted in January 2014.
Father then filed a petition with the chancery court to modify the divorce order, seeking parenting time and a reduction in child support. During a hearing held in October 2014, the chancery court held that father’s unemployment was voluntary, but mother’s underemployment was not. As such, the chancery court modified Father’s support obligation to $2,200 per month, a slight upward deviation from the guidelines. Both Mother and Father appealed.
On appeal, Father argued that the chancery court erred in granting an upward deviation from the guidelines. Mother argued that the chancery court had not granted enough of an upward deviation from the guidelines. Under Tennessee law, courts may only consider the first $10,000 of a supporting parent’s monthly income when setting the amount of child support. For high-income parents with one child, the presumptive child support obligation is $2,100 per month (21% of $10,000). Tenn. Comp. R. & Regs. R. 1240-2-4-.07(2)(g)(1)(i). However, if the supported parent proves by a preponderance of the evidence that more support is reasonably necessary to provide for the child’s needs, courts have the discretion to deviate from the guidelines. T.C.A. § 36-5-101(e)(1)(B). For example, courts may grant a deviation if one is necessary for the child to maintain the same standard of living with each parent. See Tenn. Comp. R. & Regs. 1240-02-04-.01(3)(e) (“[W]hen parents live separately . . . to the extent that either parent enjoys a higher standard of living, the child shares in that higher standard of living.”).
The Court held that a slight upward deviation from the guidelines was necessary due to the disparity between Father and Mother’s standard of living. Because both the decision to grant an upward deviation and the amount of the deviation are discretionary, the Court of Appeals reasoned that the chancery court was not bound to set child support at $2,600 when deviating from the guidelines. Therefore, the court declined Mother’s request for an even greater upward deviation, holding that the chancery court did not abuse its discretion in setting the amount of the deviation.
Duke v. Duke, 563 S.W.3d 885 (Tenn. Ct. App. 2018).
Tennessee Family Law Blog: https://memphisdivorce.com/tennessee-child-support-laws/doctor-ordered-to-fund-educational-trust-accounts-for-college/
This case is the result of a lengthy and complex post-divorce litigation that ended up in front of the Court of Appeals multiple times. The parties married in 1991 and had three children. Father was a physician-turned-business-owner whose company managed emergency departments for hospitals. Through his business, Father’s gross income was prodigious, averaging approximately $2,000,000 per year. Mother was a registered nurse but left the workforce and became a homemaker after the birth of the couple’s first child in 1995. Mother filed for divorce in 2007.
After contentious proceedings, the trial court entered its final divorce order. The court ordered Father to pay $4,100 in child support per month, the maximum under the child support guidelines. Additionally, as Father had already been contributing towards a college fund for the children, the trial court required Father to contribute $15,000 per child ($20,000 for the eldest child) annually to trusts set up for the children’s education until the children reached 25 years of age or graduated from college.
On Father’s first appeal, the Court of Appeals held that the trial court did not abuse its discretion in creating educational trusts for the children but remanded the case because the amount father was ordered to contribute to the trusts was not supported by the evidence. The second appeal related to a motion for recusal. On the third appeal, the Court of Appeals upheld a reduction in Father’s parenting time.
The trial court finally conducted a hearing on the issue of Father’s contribution to the educational trusts in 2015, after the third appeal. The trial court found that Father had not contributed to the educational trusts since 2011. However, the couple’s eldest child had already started college. Thus, the trial court held that Father owed $23,750 in back deposits and ordered him to deposit $5,729 and $3,451 each month into the younger two children’s accounts. When combined with his other obligations, Father’s total support obligation amounted to 41% of his annual income. Father appealed for a fourth time.
T.C.A. § 36-5-101(e)(1)(B) sets the maximum income used for calculating child support obligations at $10,000 per month unless the parent receiving support proves by a preponderance of the evidence that grater support is necessary to provide for the child. Tennessee courts have the discretion to order parents contribute to educational trusts as part of their support obligation. Tenn. Comp. R. & Regs. 1240-02-04-.07(2)(g)(2)(iii). Thus, the Court of Appeals agreed with Father’s argument that the educational trust contributions constituted an upward deviation from the Child Support Guidelines. However, given Father’s ability to pay, the children’s standard of living, their projected educational expenses, and the fact that the child support guidelines set child support at 41% of monthly income for three children, the Court held that the upward deviation from the child support guidelines was not in error.
Church v. Elrod, No. M2018-01064-COA-R3-CV, 2019 WL 1349797 (Tenn. Ct. App. Mar. 25, 2019).
Tennessee Family Law Blog: https://memphisdivorce.com/tennessee-child-support-laws/fathers-obligation-to-pay-tuition-must-take-scholarships-into-account/
Mother and Father legally separated in 2002. In their separation agreement, Father agreed to pay $3,003 per month in child support for the couple’s four children. The couple attempted to reconcile, but ultimately filed for absolute divorce three years later. The trial court’s divorce order, entered February 2005, incorporated the support obligation from the AOLS.
Ten years later both parties had remarried and Father filed a petition to modify his child support obligation. Specifically, he sought to terminate his obligation to his three eldest children as they had turned 18. He also sought to reduce his support obligation for his youngest child. Mother filed a counter complaint seeking greater support for the youngest child to help maintain her lifestyle.
The trial court found that Father’s annual income had increased from $111,000 to $289,583 since the divorce. Mother and her new husband’s joint income was $161,535 annually, with Mother’s contribution totaling $44,316. As such, the trial court held that Father’s support obligation would remain $3,003 per month, even though he would now only be contributing to one child. The trial court cited Father’s increase in income, high standard of living, ability to support his new family, and limited parenting time to support its decision. Father appealed.
The Court of Appeals explained that under Tennessee law, courts may only consider the first $10,000 of a supporting parent’s monthly income when calculating child support. T.C.A. § 36-5-101(e)(1)(B). However, if the supported parent proves by a preponderance of the evidence that more support is reasonably necessary to provide for the needs of the child, the court may grant more child support. Id. Father’s presumptive child support obligation under the Tennessee Child Support Guidelines was $2,100 per month. Tenn. Comp. R. & Regs. R. 1240-2-4-.07(2)(g)(1)(i).
The Court reasoned that the purpose of the guidelines is to ensure that the children in co-parenting arrangements do not suffer a drastic drop in their standard of living during the economically disadvantaged parent’s parenting time. See Tenn. Comp. R. & Regs. 1240-02-04-.01(3)(e). Citing Mother’s expenses and Father’s affluent lifestyle, the Court held that the trial court did not err in granting an upward deviation from the child support guidelines and affirmed the trial court.
Hollis v. Hollis, No. E2020-01123-COA-R3-CV, 2022 WL 2348567 (Tenn. Ct. App. June 29, 2022).
Mother and Father married in 1996 and had four children. Mother also had a child from a previous marriage. The couple’s two youngest children have down syndrome and require round the clock supervision and care. Father was a successful financial advisor with a sizeable income. As such, the parties agreed that Mother would leave the workforce to care for their special needs children. In 2018, Wife filed for divorce. At the time, the couple’s two eldest children were no longer minors.
The trial court found that Father’s monthly income for child support purposes was $73,530. Given the minor children’s disability, the trial court found that their reasonable childcare expenses totaled $6,905 per month. The court also found that trips and outside activities were necessary for the children’s development, added an additional $1,611 to father’s monthly child support obligation to account for the increased cost of traveling with children with down syndrome. Thus, the court set child support at $8,516. Lastly, the court ordered the father to fund a trust to provide for the children’s ongoing care into adulthood at a rate of $1,000 per month ($500 per child). Husband appealed.
On appeal, Husband argued that statements made by the trial court showed that it abused its discretion in ordering him to pay $8,516 in child support for two children. Under Tennessee law, courts may only consider the first $10,000 of a parent’s monthly income when setting child support obligations. T.C.A. § 36-5-101(e)(1)(B). For high-income parents with two children to support, the presumptive child support obligation is $3,200 per month (32% of $10,000). Tenn. Comp. R. & Regs. R. 1240-2-4-.07(2)(g)(1)(ii). However, if the supported parent proves by a preponderance of the evidence that more support is reasonably necessary to provide for the child’s needs, courts have the discretion to deviate from the guidelines. T.C.A. § 36-5-101(e)(1)(B). The trial court stated that it would grant a “generous, but not unlimited” amount of child support and that it might be creating “new law” by deviating from the guidelines. Husband argued that these statements showed that the court abused its discretion by ignoring existing law in setting child support.
The Court of Appeals held that the trial court’s remarks were harmless and did not show abuse of discretion. The Court reasoned that Husband had taken the comments out of context. After stating that its child support award would be “generous, but not unlimited,” the trial court added that the amount would be “reasonable, [based on a review of] all of the exhibits in this case concerning money spent versus money actually needed.” Accordingly, the Court of Appeals held that the trial court applied the corrected legal standard to the case and had not created “new law.” Therefore, the Court of Appeals affirmed the trial court’s ruling on child support.
Upward Deviation Reversed
Beyer v. Beyer, 428 S.W.3d 59 (Tenn. Ct. App. 2013).
Tennessee Family Law Blog: https://memphisdivorce.com/home/tn-heart-surgeons-visitation-limited-after-pattern-of-emotional-abuse/
Husband and Wife married in 1994, the same year Husband finished medical school. Wife, who already had a masters degree in marketing, earned another degree in economics that same year. During Husband’s surgical residency, Wife worked various jobs until the couple had their first child, at which point the couple agreed that Wife would become a homemaker and care for the kids. The couple had two more children during the marriage. Husband advanced in his career, and over time, his monthly income grew to $32,646.
In 2007, Wife discovered Husband was having an affair and moved in with her parents in Germantown, Tennessee. In 2008, Wife filed for divorce. During the divorce proceedings, Father refused to cooperate with multiple court orders and grew increasingly abusive towards his children. In its final divorce order, issued in 2011, the trial court ordered Husband to pay Wife $4,100 per month in child support. In addition, the trial court ordered Husband to pay an additional $500 per month to each child directly, in individual deposits made to separate savings accounts in each child’s name. Husband appealed.
The issue on appeal was whether the trial court erred setting Husband’s support obligation higher than the amount set forth in Tennessee’s child support guidelines. Under Tennessee law, if a parent subject to a child support order’s net income exceeds $10,000 per month, then the supported parent “must prove, by a preponderance of the evidence, that child support in excess of the amount provided for in the child support guidelines [at the $10,000 monthly income level] is reasonably necessary to provide for the needs of the [children].” T.C.A. § 36-5-101(e)(1)(B). An obligor parent who makes $10,000 or more per month and has three children to support is required to pay $4,100 per month in child support. Tenn. Comp. R. & Regs. 1240-02-04-.07(2)(g)(1)(iii). When deviating from the guidelines, courts must make specific findings of fact stating “[t]he reasons for the change or deviation from the presumptive amount of child support that would have been paid pursuant to the Guidelines.” Id. at -.07(1)(c)(1).
The Court of Appeals reversed the trial court’s order on child support, holding that the trial court did not make any findings of fact or provide any justification for increasing Father’s support obligation. As such, the Court remanded the case back to the trial court to make such findings.
Denial of Upward Deviation Upheld
Wiser v. Wiser, 339 S.W.3d 1 (Tenn. Ct. App. 2010).
Husband and Wife married in 1982 and had two children, born in 1992 and 1996, who they raised in Murfreesboro, Tennessee. Husband was an engineer and the sole owner of Wiser Company LLC, which served as a vehicle for Husband’s diverse business interests, including commercial real estate. Through his business, Husband earned a considerable, though variable, income in excess of $10,000 each month, and the family enjoyed a lavish lifestyle. Wife was a college graduate and interior designer who briefly worked for Wiser Company, LLC but spent the majority of the marriage caring for her children as a homemaker.
Their relationship soured, and Wife filed for divorce in 2004. In the divorce settlement, the couple agreed to a parenting plan in which they divided parenting time equally. Additionally, Husband agreed to pay Wife $1,498 per month in child support. The trial court entered its final order granting divorce in 2005, incorporating the parenting plan and ordering Husband to pay Wife alimony for twelve years—$6,000 per month initially, with the amount decreasing by $1,000 per month every four years. In 2007, Wife filed a petition to increase alimony and child support, alleging material and substantial change in circumstances and arguing that Tennessee’s Child Support Guidelines had been changed, increasing Husband’s obligation by 15%.
The trial court denied Wife’s request to increase alimony but granted Wife’s request to increase child support. However, the trial court declined to grant an upward deviation from the Guidelines, reasoning that Husband and Wife shared equal parenting time and the Husband provided for many of the children’s expenses directly.
On appeal, Wife claimed the trial court erred in refusing to increase alimony and to grant an upward deviation from the Child Support Guidelines. Regarding alimony, the Court of Appeals increased Husband’s alimony in futuro obligation to $10,000 per month, reasoning that Husband’s average monthly income had increased and that his finances were no longer as volatile now that his business had stabilized.
However, the Court of Appeals upheld the trial court’s refusal to grant an upward deviation from the child support guidelines. For high-income parents, Tennessee courts may not consider income in excess of $10,000 per month when calculating child support unless the economically disadvantaged spouse can demonstrate that more support is reasonably necessary to provider the children’s need. T.C.A. § 36-5-101(e)(1)(B). Although the Child Support Guidelines are meant to ensure children in co-parenting situations maintain the same standard of living at each parent’s home, and Wife was unable to provide the children with the same lavish lifestyle as Father, the Court reasoned that the increase in alimony it granted would help Wife provide children with a standard of living more in line with Father’s. As such, the Court held that the trial court did not err in refusing to grant an upward deviation from the guidelines.
Muse v. Jolley, No. E2017-01122-COA-R3-CV, 2020 WL 4357335 (Tenn. Ct. App. July 30, 2020).
Tennessee Family Law Blog: https://memphisdivorce.com/tennessee-child-support-laws/income-determination-tennessee-child-support-laws/lawyers-income-pegged-at-10k-mo-for-child-support-purposes/
Mother and Father, both attorneys, married in 1996 and had three children. Their relationship soured and the couple initiated divorce proceedings in 2010. After five years, the parties could not reach a divorce settlement and went to trial. At trial, Wife entered a summary of Husband’s income into evidence showing that his annual income fluctuated between $88,418 to $220,620 from 2004 and 2015. In its final order granting divorce, the trial court found that Husband’s average monthly income during those years was $10,000 and that Wife’s was $8,500. The court also found that Husband and Wife had equal earning potential as practicing attorneys. Thus, the trial court held that Husband’s income was $10,000 per month for child support purposes and set his monthly support obligation at $911. Mother appealed the trial court’s calculation of Husband’s income for child support purposes and the court of appeals affirmed.
Julie C. W. v. Frank Mitchell W., No. M2019-01243-COA-R3-CV, 2021 WL 745288 (Tenn. Ct. App. Feb. 26, 2021).
Tennessee Family Law Blog: https://memphisdivorce.com/tennessee-child-support-laws/lawyer-neednt-pay-more-than-child-support-guideline-amount/
Mother and Father, both attorneys, met while working at the same firm. Father was a partner while Mother was on a partnership track. Father had two children from a previous marriage. The pair married in 2003 and had two children of their own. After their first child was born, Mother reduced her hours to part time. She took a two year sabbatical in 2011, when the second child was 3 years old. When she returned to work, she became a staff attorney and was no longer on a partnership track.
Mother filed for divorce in 2013. After lengthy and contentious litigation, a trial was held in 2018. Evidence introduced at trial showed that in 2017, Father’s income was $1,708,698 ($142,392/month) and Mother’s was $153,293 ($12,774/month). Mother claimed she incurred $11,388 in monthly childcare expenses, including $1,037 on food, $1,000 on home goods, $1,090 on travel and vacations, $648 on entertainment, and $500 on school trips. Under Tennessee law, courts may only consider the first $10,000 of a supporting parent’s monthly income when calculating child support unless the supported parent proves that more support is reasonably necessary to provide for child’s needs. T.C.A. § 36-5-101(e)(1)(B). For high-income parents supporting two children, the support guidelines set the maximum obligation at $3,200 per month (32% of $10,000). Tenn. Comp. R. & Regs. R. 1240-2-4-.07(2)(g)(1)(ii). The trial court held that Mother’s claimed expenses were “not only unreasonable [but] unbelievable,” and set Father’s support obligation at $3,200 per month. Mother appealed.
The Court of Appeals affirmed the trial court. The Court reasoned that, while courts may grant upward deviation from the guidelines to ensure that children of separated parents share in the higher standard of living their economically advantaged parent can provide, such decisions are discretionary. Tenn. Comp. R. & Regs. 1240-02-04-.01(3)(e). Accordingly, child support determinations can only be overturned on appeal if the trial court abused its discretion, meaning it made its decision without an adequate evidentiary foundation. State ex. rel. Anderson v. Taylor, No. M200102193COAR3CV, 2003 WL 21480087, *4 (Tenn. Ct. App. June 27, 2003). Thus, large income disparity alone would not be enough of a reason to overturn the trial court’s decision. Additionally, the Court held that none of the facts were sufficient to call the trial court’s assessment of Mother’s credibility regarding her claimed childcare expenses into question. Therefore, the Court of Appeals held that the trial court did not abuse its discretion in refusing to grant an upward deviation from the child support guidelines.
Waddell v. Waddell, No. W2020-00220-COA-R3-CV, 2023 WL 2485667 (Tenn. Ct. App. Mar. 14, 2023).
Mother and Father married in 2002 and had their first child that year. Mother gave birth to the couple’s second child in 2006. For most of the marriage, Mother was a homemaker while Father worked for a company founded and owned by his parents. However, starting in 2016, the company was restructured, the shares were sold, and the proceeds were placed in a series of trusts which were then decanted together into a single trust. Initially, Father served as both trustee and co-beneficiary of this trust along with the children. However, Father stepped down as trustee and was replaced by an investment company in April 2017.
Mother filed for divorce in August 2017. After lengthy and contentious divorce proceedings, the trial court entered its final order in September 2019. For purposes of calculating child support, the trial court found that Mother had no income while Father’s earning capacity was $1,000,000 annually. Given Father’s high earning potential, Mother asked the court to order Father to pay $10,000 in child support per month. The trial court declined to grant Mother’s request. Instead, it ordered Father to pay $3,100 in child support per month until the couple’s eldest child turned 18 and $2,100 thereafter. Additionally, in the couples Permanent Parenting Plan, the trial court also ordered Father to pay any “reasonable and necessary educational expenses, extracurricular activities, and [other] special expenses for the children.” Mother appealed.
The Court of Appeals affirmed the trial court’s ruling. Under Tennessee law, courts may only consider the first $10,000 of a parent’s monthly income when determining the parent’s child support obligation. T.C.A. § 36-5-101(e)(1)(B). For high-income parents, the state’s child support guidelines sets their support obligation at $3,200 per month for two children (32% of $10,000) and $2,100 for one child (21% of $10,000). Tenn. Comp. R. & Regs. R. 1240-2-4-.07(2)(g)(1)(i)–(ii). However, courts have discretion grant more support to provide for “extraordinary expenses,” including education related expenses, if the supported parent proves by a preponderance of the evidence that more support is reasonably necessary to provide for the children. Id. at -.07(2)(d).
The Court of Appeals reasoned that an upward deviation from the support guidelines was unnecessary because the trial court already ordered Father to pay for the children’s educational expenses in the parenting plan. As outlined in an exhibit attached to the trial court’s order, these additional expenses totaled $9,810 per month, more than $6,800 upward deviation Mother requested. Therefore, the Court held that the trial court did not err in setting child support at $3,200 and affirmed the Court’s ruling.
End of memo.
Thank you for this research, Brendan.
