High net worth can change the definition of reasonable needs when a marriage ends. Texas family courts follow guidelines in child support cases that are meant to be fair for parents at every financial level. However, wealthy Harris County parents may have a different perception of child financial needs than a judge.
Peter Orszag’s salary as the director of the White House Office of Management and Budget was $145,000 in 2007, the year after Orszag and his wife divorced. The former couple worked out a child support agreement that included a $400,000 trust fund to cover the children’s education and other expenses. A 2008 agreement modification split the costs of the children’s vacations and care equally between the parents.
Orszag took a job with Citigroup that increased his earnings to $3.6 million by 2012 — the same year Orszag’s ex-wife Cameron Kennedy filed a petition to amend child support. Kennedy asked for $22,000 per month, which a court recently denied. A judge ruled Kennedy’s annual income of $350,000 was more than enough for a “high-earning party” to provide the children, now 12 and 14, with a “comfortable lifestyle.”
Instead of child support, Orszag was directed to pay the full costs of the children’s private education, uncovered health care expenses and activities like summer camp. A judge decided the children had adequate financial support from both their wealthy parents’ homes. The ruling also noted the children would benefit, if the contentious parents no longer had an agreement that required direct contact.
Affluent parents can provide far more than the basics children require. How much more child support is needed can be worked out between parents or modified later, if substantial financial changes occur. When an agreement cannot be reached, a court will review the case and decide what’s fair, with the top priority being the best interests of the child or children.
Source: The Washington Post, “Child-support drama ends in legal win for Peter Orszag” Helena Andrews, Jul. 10, 2014