Kevin Costner’s divorce and child support battle continues to make the news. On September 8th, 2023, a family court judge ruled that Costner’s ongoing monthly support payments to ex-wife Christine Baumgartner would be $63,209 monthly. This is less than half the original amount ordered in July, which was $129,755 per month.
Even the updated order is a staggering amount. But Costner isn’t alone in paying tens or even hundreds of thousands of dollars a year in support. Other celebrities pay similarly sky-high sums. For example, Ye, formerly known as Kanye West, has been ordered to pay ex-wife Kim Kardashian $200,000 per month. Similarly, Charlie Sheen pays $77,000 monthly to his ex-wives for his three children, and Halle Berry pays $24,000 to her children’s fathers.
But why do celebrities pay so much in child support in California? That’s an excellent question. In most cases, it can be rephrased as “Why do high-income people pay more in child support?” Let’s break down how it is calculated in the state, why a parent’s income plays such a large role, and how to prepare for your own order.
How California Calculates Child Support
California uses a standard calculation to determine if and how much a parent should pay in child support. The basic equation for one child is included in California Family Code Section 4055 as follows:
CS = K[HN – (H%)(TN)]
Let’s break down what each section means.
- CS: Child Support, the total amount paid by the higher-earning party.
- HN: The higher earner’s total net disposable income after other obligations are accounted for, such as taxes, other court orders, mandatory union dues, and health insurance
- TN: The total of both parents’ net disposable income
- K: The total amount of both parents’ income that is designated for support, as determined by a separate calculation that accounts for their financial abilities – for high-asset parents with shared custody, this is usually (1+H%)(0.12 + 800/TN)
- H%: The percentage of time the higher earner will spend with the children
To summarize, the amount ordered by California guidelines equals the higher earner’s net disposable income minus the parents’ total net disposable income multiplied by the percentage of time the higher earner spends with the kids, adjusted according to their overall incomes.
This calculation can lead to either parent paying support, depending on the circumstances. For example, if parents’ incomes are relatively close, but the higher earner has sole physical custody, the lower earner will likely be required to pay them support. However, if there is a substantial income discrepancy, the higher earner will be required to pay the other person if they have any percentage of physical custody.
How Large Income Disparities Affect Child Support Orders
Let’s imagine a couple where one person has $1 million in monthly disposable income while the other earns nothing. They share equal custody of one child. Both HN and TN are $1 million in this situation because the other parent has no income. If we plug the numbers into the equation above, here’s what we get:
CS = 0.1812[$1,000,000 – (50%)($1,000,000)] = $90,600
In other words, the higher earner would be on the hook for $90,600 a month. What does this look like if the higher earner has custody 99% of the time?
CS = 0.1220[$1,000,000 – (99%)($1,000,000)] = $1,220
Despite being almost entirely responsible for their children’s care, they would still owe their co-parent $1,220 a month under this guideline. In short, large income disparities almost always lead to California’s calculation recommending the higher earner pay significant amounts, and the amount grows as the gap widens.
Negotiating a Fair Support Order
If you are preparing for a divorce or child custody case, you should know that California’s formula is not set in stone. It produces a recommended number, but courts may award a different amount in certain circumstances. In fact, coparents may even negotiate alternative monthly payments as long as both parents continue to provide financially for their children.
For instance, Kevin Costner attempted to negotiate with Baumgartner, offering $75,000 monthly for her to use to raise their kids. However, she refused. As a result, their case went to court, where she initially demanded more than $248,000 a month. Unfortunately for Baumgartner, after months of legal disputes, the final order came out to just $63,209 – less than Costner had offered in the first place. Had Baumgartner negotiated, she would have saved money, time, and stress in the long run.
This is why the first step to negotiating a fair support order is to exchange financial information and run it through California’s calculation. The result is an objective baseline based on your income and custody arrangements. You can then negotiate a higher or lower number based on your circumstances. For example, many high-income coparents take on the responsibility for paying all school tuition, medical expenses, and other routine costs of raising children in exchange for lower monthly support payments. Your attorney can help you determine the most effective negotiation strategies for achieving a fair agreement without unnecessary litigation.
Reduce the Risk of Excessive Child Support With Expert Legal Counsel
Child support can significantly impact your finances, particularly if you have substantial income. However, it is possible to negotiate the amount you’ll pay instead of abiding strictly by California’s support calculation.
The most effective way to set an alternative support rate is to work with an experienced family law attorney. The experts at Kaspar & Lugay LLP can help you negotiate your order and avoid celebrity-level monthly bills. Schedule your consultation today to discuss how we can assist you with your high-income child support order.