Flemington, NJ asked in Child Support for New Jersey

Q: In nj i recently made 5 million on stock market and have 2 years of child support left, how would that effect CS, Or not

2 yrs of college left, and I got lucky with stocks, can I keep that away from $ hungry Ex. Or not?

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2 Lawyer Answers

A: Child support is the right of the child, not "the money hungry Ex." That said, child support is driven by income, not assets. If the money you made from the stock market were to factor into a child support calculation, a reasonable rate of income derived from the investment of those gains would need to be calculated. There is not a true science as to how a Court would perform this calculation. If your child has two years of college left, you might want to consider taking some of those earnings and offering to cover the costs of the last two years of college and reasonable living expenses, to avoid the uncertainty of litigation. Of course, this suggestion is being offered without really knowing the particulars of your case. It would probably benefit you to schedule a consultation with a qualified family law attorney to understand all of those facts and circumstances, in order to work out the best way to go.

A: Let me start off by congratulating you on your stock market success. My next suggestion is to immediately pay off all taxes due on the gain realized from the 5 million, so that the amount in your account is "net income". Next, understand that child support is always subject to modification based on each parent's current financial setting, meaning that if you earn significantly more in the future, your child is entitled to be supported based on your then current income setting BUT child support is not based on your employment income and your asset portfolio but on the income flow from your employment and the income flow from your investment account.

So, if you earn 50,000 per year from your employment and you have 3,000,000 in your investment account, the court can combine the 50,000 in employment income AND the dividend and interest income from your 3,000,000 in your investment account to determine your cash flow for child support purposes. So, assuming you are generating 127,500 per year from your investment account ( 4.25% ), your total income setting for reexamination of child support would be 50,000 + 127,500 = 177,500

As to the sharing of your child's college costs, that analysis is a little different though. If your child is attending college and the costs are being shared between you and your ex, then we would look at your cash flow ( 177,500) plus we can look at your assets as well to determine what is a fair sharing of the remaining college costs as part of that analysis ( and yes, we would look at your ex's in the same way).

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