Texas has a 'soft cap' on child support, which means that there is sort of a maximum level of child support that a person can be ordered to pay. There are ways to exceed this cap, but that is rare. The 'soft cap' is equal to someone making $140,000/year and translates to $1,710/month for one child.
In Texas, most parents agree to have guideline child support deducted from an obligor parent’s paycheck. However, it is within a court’s power to order child support through any of the following methods:
- Periodic payments
- Lump-sum payments
- Annuity purchase
- Setting aside of property to be administered for the support of the child as specified in the order
- Any combination of the above
A periodic payment is a one which takes place at a recurring interval. A parent may elect to pay their ex-spouse at an agreed interval. When possible, all payments should be made through the Office of The Attorney General’s State Disbursement Unit (SDU). Payment through the SDU ensures that the state has an accurate and current record of all support accounts.
A Lump-Sum Payment
In rare circumstances, parents will agree to a one-time payment that satisfies a child support obligation in its entirety. While financially infeasible for many individuals, lump-sum payments protect from the possibility of future disputes over periodic payments. For a real-life example, see Moroch v. Collins, 174 S.W.3d 849, 867-68 (Tex. App. 2005) [Where a divorce decree ordered a wife to pay her husband a one-time lump sum child support payment of $76,000 within one day of the closing of the sale of the DeLoache property, if she sold the property, or by December 31, 2002, whichever occurred first. The amount was equal to $ 1,500 per month for two children, times seven months, and $ 1,200 per month for one child, [*868 times fifty-five months.]
An Annuity Purchase
An annuity purchase allows an obligor parent to fully satisfy his support obligation through a lump-sum payment to a brokerage firm which will disburse periodic payments to a beneficiary. For an example, see In re W.M.R., No. 02-11-00283-CV, 2012 Tex. App. LEXIS 9097, at *5-6 (App. Nov. 1, 2012) [ In which a father argues that his child support obligation ended when W.M.R. turned eighteen for two reasons. He argued that the annuity payment “zeroed out” his child support obligation, thereby ending it.]
The Setting Aside of Property
Upon the entry of a final decree of divorce, a court may set aside a certain property (real or personal) for the sole benefit of a child. For an example, see Muller v. Muller, No. 2-02-349-CV, 2003 Tex. App. LEXIS 7550, at *1 (App. Aug. 28, 2003) [ Where the trial court signed a final decree of divorce and judgment, dissolving the marriage of the parties. On appeal, the husband appealed the ruling concerning his separate property house. The court affirmed the decision of the trial court, stating that it was undisputed that the property set aside for the use of the wife and the daughter was the separate property of the husband. However, the trial court acted within its statutory authority in finding that it was in the child’s best interest to reside in the residence with the wife and in awarding the temporary and limited use of the residence as child support, Tex. Fam. Code Ann. § 154.003(4) (2002).
Support Directly Withheld from a Paycheck
Pursuant to federal law, when a trial court orders income withheld for child support, the trial court must order that these funds be “paid to the state disbursement unit of this state, or if appropriate, the state disbursement unit of another state.” Once a Texas court issues a child support order, an amount may be withheld from an obligor’s disposable earnings. Pursuant to the Texas Family Code Section 158.001: In a proceeding in which periodic payments of child support are ordered, modified, or enforced, the court or the Title IV-D agency (The State of Texas Attorney Generals office) shall order that income is withheld from the disposable earnings of the obligor as provided by this chapter.
Child support can be paid by any combination of periodic payments, lump-sum payments, annuity purchases, or setting aside of property. You should speak with a licensed attorney to determine which method would work best for you.