Child support and the high income parent: the uses and misuses of the good fortune trust.

• Author: Morgan, Laura W.
• Position: Florida

The high income parent poses special problems in the determination of child support. Courts are loath to award support that is deemed "excessive," yet the courts are bound by the strictures of the child support guidelines that set a presumptively correct amount of support.(1) Further complicating the matter is economic research that suggests that child support guidelines themselves are flawed in setting support for the high income parent. One study has suggested that the underlying economic data failed to reflect true child-related expenditures in upper income families including such nonconsumer expenditures as principal on home, savings, and trusts for the benefit of children. Thus, the income shares model, predicated on the premise that, as income increases, the percentage of income dedicated to child support decreases, does not accomplish the goal of ensuring that parents, after they break up, continue to spend on their children the same percentage of income that they would have spent if they were together.(2)

The recent case of Finley v. Scott, 23 Fla. L. Weekly S51, S149 (Fla. Jan. 29, 1998), has focused attention anew on one way in which courts have solved this conundrum: the "good fortune trust."(3) A good fortune trust may be established by the court in the case of the high income parent in which the court deems the child support guidelines' presumptive award to be "excessive." In establishing the good fortune trust, the court determines the amount of child support due under the presumptive guidelines, and then further determines the reasonable needs of the child, albeit the reasonable needs of wealthy parents. The court then awards as day-to-day support the reasonable needs of the child, and places the difference between the presumptive award and the daily award into a good fortune trust, to be used by the child for post-majority support. The good fortune trust is a way to ensure that, in upper income families, the child support award more closely duplicates the funds that the parents would have expended on the children in the absence of a divorce.

It ... follows that if one of the goals of child support guidelines is to most nearly duplicate the "standard of living" a child would have enjoyed had the parents remained married, then in the case of high-income parents, "support" should include principal on the marital home, savings, and trusts for the benefit of children.(4)

Prior to the decision in Finley v. Scott, the best example of a court embracing the concept of a "good fortune trust" was Boyt v. Romanow, 664 So. 2d 995 (Fla. 2d DCA 1995). In that case, the trial court found that application of the support guidelines would yield a presumptive award of $2,654.09 per month. The child's reasonable needs, however, were $1,500 per month. Instead of ordering child support in the amount of $1,500, the court ordered that the father pay $1,500 per month to the custodial mother, and place the excess $1,154 in a "good fortune trust" to be used for the child's post-minority expenses. The appellate court upheld the creation of the trust, holding that the child has the right to share in the affluence of the parents:

The trial court acted within its authority in attempting to regulate and supervise the amount of child support which the court determined exceeds the child's needs. The amount of $1,500 per month for the parties' three-year-old certainly takes into consideration those "extras" this child of an affluent parent needs. In regard to the excess, the court has the inherent power within its sound discretion to safeguard the minor child's well-being for the present and for the future.(5)

Finley v. Scott settled the question of the propriety of a good fortune trust in Florida. In that case, the father is...