What does Child support pay?

Question 1:

Worksheet B requires parents to work together on expenses relating to the children.

Specifically the instructions provide -

“To be a true sharing of physical custody, costs for the child should be divided between the parents based on their respective percentage shares of income. To the extent that one parent assumes a disproportionate share of costs (for example, one parent buys all of the child’s clothes), the worksheet should not be used or should be modified accordingly.”

That is as much detail as the instructions provide. I think it requires a pro-rata sharing of all costs. If parents are unable to function as required by the instructions then the court would likely make a worksheet A calculation for support.

Question 2:

There are no capial gains taxes on gains made in a 401(k). The only taxes paid on the 401(k) are income taxes.

If your spouse receives a transfer to an IRA pursuant to a QDRO (Qualified Domestic Relations Order) there will be no tax incurred by anyone until a distribution is made from the IRA.

If your spouse receives a transfer directly (rather than to an IRA) there will be income tax on the transfer.

If your spouse receives a transfer to an IRA and then later pulls out the money - prior to the age of 59 1/2 and inconsistent with the rules permitting withdrawals from an IRA then your spouse will incur income tax on the distribution plus an additional tax of 10%.

If your spouse wishes to make repeated transfers from your 401(k) then your spouse will require a new QDRO for each transfer (which may make multiple transfers less appealing due to the cost and hassle of the document drafting).

Good luck.

Lee S. Rosen
Board Certified Family Law Specialist
The Rosen Law Firm
4101 Lake Boone Trail, Suite 200
Raleigh, North Carolina 27607
NCdivorce.com
(919)787-6668

The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service but a full discussion with an attorney should be undertaken before taking any action.

Question 1
My wife and i are using Worksheet B and I am not clear on what the child support payment covers, and more importantly what it does not? Can you please provide a general list of items that are covered and the items that are not, how is that split. Is there a document that reviews this as a state guideline?

Question 2:
funds that are past to my spouse from 401Ks. i understand that is not subject to the 10% early withdrawl penalty and
is then taxed as normal income to her. Is there capital gains on the sale of the stocks that were in the 401K and how long does she have to cash these out. Can she take muliple withdrawals or is it a one time option. If Multiples are allowed for what period of time?