How California Calculates Spousal Support when High-Income Earners Divorce
Spousal support, often referred to as alimony, can be a complex and sensitive issue in California divorces. This is especially true when one or both spouses have very high incomes or multiple streams of income. Understanding how courts approach support calculations in these cases is essential.
Understanding California Spousal Support
In California, spousal support is designed to provide financial assistance to a lower-earning spouse after divorce. There are two types of spousal support – temporary support (which is ordered during the divorce proceedings) and post-judgment (which is ordered after the divorce is finalized). Temporary spousal support is ordered to maintain the status quo during the divorce proceedings, and post-judgment spousal support is ordered to assist the lower-earning spouse to maintain the standard of living until he or she becomes self-supporting.
The state does not have a fixed formula to determine all aspects of a fair support order for high-income divorce cases. While fixed formulas exist which largely govern the calculation of spousal support in most divorce cases, high-income divorce is often different.
Courts evaluate multiple factors that are detailed under California Family Code Section 4320 when determine the appropriate amount of spousal support, which includes:
- Duration of the marriage
- Age and health of both spouses
- Standard of living during the marriage
- Earning capacity and marketable skills
- Contributions to the other spouse’s education or career
- Assets and separate property
- The ability of the supporting spouse to pay
High-Income Considerations
When spouses have very high incomes, determining an equitable spousal support order becomes more nuanced. Courts aim to balance two main goals:
- Maintaining the standard of living enjoyed during the marriage.
- Avoiding financial hardship for the supporting spouse.
Courts often examine total household income, including salary, bonuses, dividends, rental income, and business profits. California courts seek to maintain a “reasonable” standard of living similar to that established during the marriage. In very high-income marriages, this can result in substantial spousal support awards that reflect luxury expenses, multiple properties, or other high-cost lifestyle elements. When a spouse has several sources of income, courts may consider the stability and predictability of each income source, as well as whether income is passive or earned.
Contact Cardwell Steigerwald Young LLP
Calculating spousal support in California for very high-income earners is not a simple formulaic process. Whether you are the supporting or receiving spouse, understanding these principles can help you protect your financial future and navigate high-stakes spousal support determinations. Contact our San Francisco family lawyers for help today.
