Tag Archives: money

Calculating “net resources” for child support purposes

One of the most frequently asked questions in the family law context concerns the calculation of child support. To calculate child support in Texas, the law provides a three-step process:

1. Determine “net resources”
2. Apply the child support guidelines to the “net resources” to determine the amount of support
3. Consider any other factors that might justify deviating from the guidelines and adjust the support as appropriate

The focus of this blog post will be on the calculation of “net resources,” which is often the most confusing issue among the three steps listed above. So, how does one calculate “net resources?”  

To arrive at “net resources,” the starting point is a determination of all income earned on an annual basis (“gross income”). This amount includes wage and salary income, self-employment income, severance pay, retirement pay, social security benefits, unemployment benefits, disability and workers’ compensation benefits, alimony, child support, net rental income, interest income, capital gains, trust distributions, annuity income, gifts, prizes and all other sources of income.

Next, the court will subtract certain items. The most common deductions include federal income taxes, social security taxes, and the cost of the child’s health insurance, i.e., his/her premiums. It is important to note that the figure used for federal income taxes is not always the exact amount paid, but rather, the rate for a single person claiming one personal deduction, as well as the standard deduction.

After taking the appropriate deductions, divide by 12 to arrive at the “monthly net resources.” This completes step one of the process of calculating child support.

We’ll address step two in our next blog post.

Community property vs. separate property

What is the difference between community property and separate property and why is it important in a divorce?  

Texas uses a community-property system to govern the property rights of married people.

Community property is the property acquired by either spouse during the marriage.  Examples of community property can include cash on hand, a house or other type of real property interest, motor vehicles, insurance policies, investments, business interests, and retirement, such as a 401(k) or company pension plan.

Separate property generally consists of the following:

  • Property owned before the marriage (e.g., a house bought before the marriage);
  • Property acquired by gift (e.g., an engagement ring); or an
  • Inheritance.

In Texas, courts divide the community property of the marriage upon divorce.  However, courts are prohibited from dividing a party’s separate property, which is why the distinction can be so important in a divorce proceeding.

Should you have questions concerning your property rights, please do not hesitate to consult with a qualified lawyer specializing in family law.

What is a retainer?

Most lawyers engaged in the practice of family law use retainers. Yet, I’m often asked, “What is a retainer?”

A retainer is a specific amount of money that is obtained in advance of the legal work to be performed.  The retainer is placed in a trust account and used as a reserve for the lawyer to charge against as he works on your case.  The amount of the retainer is determined primarily on the estimated amount of time that needs to be dedicated to your case for the month.  Typically, retainers are refundable and, thus, the amount of the retainer in trust after charges is refunded to the client upon closure of their case.

Abraham Lincoln once quipped that a retainer was important because the lawyer then knew he had a client and the client knew he had a lawyer.