Step Parenting Part 4 - Money

No discussion on blended families would be complete without talking about money. First, lets just accept the fact that NOBODY, regardless of what side you're on, feels like the monetary settlement in their divorce was fair. In Wisconsin, especially in Waukesha county, the courts place a heavy emphasis on equitable division of assets and use predetermined calculations for child support and maintenance (alimony). Who is at "fault" is completely irrelevant because, as I mentioned earlier, neither party is typically willing to admit their role in the failure of their marriage. If you worked or earned significantly more than your spouse, that does not mean you are due a higher percentage of your total assets. Wisconsin courts don't view assets or liabilities as "His" or "Hers".

Child support, in particular, is a sore spot for most people whether they are on the paying or receiving end. If you are married to someone paying support, it is important that you understand the following facts:

1. Paying to support the children you brought into this world is not only a legal but a moral obligation.
2. The court will determine the amount owed and there is very little you can do to change it.
3. Step parents are not legally obligated to support their stepchildren. If your spouse's ex remarries, that does not imply a reduced support obligation on your spouse's part. Likewise, your income can not be considered in calculating support payments. This is something to remember when debates come up. My husband's ex knows she doesn't have rights to my income from a support perspective, but she did attempt to argue that while my husband should carry a life insurance policy, she shouldn't have to because if something happened to her, the children would be going to a two income household. Sorry, wrong answer. While I would support my stepkids because I love them, that does not mean she is any less obligated to plan for her children's future in the event of her death than my husband is.
4. Accept the above facts and move on. Don't dwell on how the ex spends the money redecorating the house and taking trips while the kids come over in clothes that are torn and too small. There is nothing you can do about it and as wrong as you might think this is, the payee has no accountability to the payor. Once the money transfers hands, how it is used is none of your business.

That being said, the child support system (at least in Wisconsin) is royally screwed up. While laws have changed recently, you can not have your support order changed just because the laws changed. You must have a significant change in circumstances to have your support order modified.

Prior to these new laws, the most common type of order was a hybrid order. What that means is that the payor with two children pays a fixed amount or 25% of his/her income, whichever is more (this was to prevent the payor from taking a lower paying job just to reduce his/her support payments). The problem occurs because the support order is based upon a percentage of your spouse's annual income, but the actual payments due are calculated based upon monthly income.

Let's look at a male payor who earns a straight salary of $96,000 annually and gets paid on the 15th and the 30th of each month, this is no problem. His rate will be based upon 25% of his gross income. Each month he will owe the greater of 25% of his $8000 monthly income or $2000. At the end of the year, he would've paid $24,000.

Now let's look at the same man working for a company that pays every other week. 8 months of the year, he gets paid twice and earns $6857. The other 4 months he gets paid three times and earns $10,286. Since 25% of $6857 is less than $2000, he will owe $2000 those eight months. The other four months, he will owe 25% of $10,286, or $2571.50. Because most payroll systems can't be programmed to handle this method, 25% will be taken from each paycheck. At the end of the year, the support agency will report $2286 in arrears on his account, which reflects an annual payment expectation of 27% of his income.

Even worse, consider a salesman who is paid a base salary plus commission. He may also earn $96,000 annually, but perhaps he only received his base salary for six months ($4000) and earns a great commission plus base the other six months ($12,000). Using the same hybrid formula above, he will be $6000 in arrears at the end of the year reflecting expected payments equally 30% of his annual income despite having an order based upon 25%.

To make matters worse, for some reason new employers frequently deduct your support from your first check but don't send the funds to the support agency. (Almost all support orders in Wisconsin require your employer to deduct the payment directly from your paycheck) Or, they forget to deduct the funds so you send in a check to prevent extra fees and two weeks later your employer realizes the mistake and corrects it, effectively putting you in a double payment situation. In both cases, the payor is accountable. The money is logged at the support agency and forwarded directly to the ex-spouse. The agency is not required to help you recover any over payments.

I'm not trying to discourage anyone, but entering a blended family involves certain issues that you should be aware of before closing the deal. Marry the person you love, but don't expect to feel any amount of control over your finances until the support order ends. Don't let the situation add stress to your life, just remind yourself that it's probably better to marry someone who exceeds their support commitment than someone who avoids it all together.