One of the benefits of “advice by blog” is that lawyers can be more objective in giving advice. There is not an anxious client sitting across the table asking if “Everything will be ok.” Divorce is a challenging world in the first place but is grows all the more difficult when the numbers get crazy.
When we last visited Costner-Baumgartner world on July 6, Christine Baumgartner had filed a challenge to the prenuptial agreement signed in 2004. Overthrowing prenups is tough business and, as we recently noted, some of the agreements have an in terrorem clause. That’s Latin for: You challenge the validity of the agreement you may get less or have to pay the legal fees associated with your challenge.” I packed a lot of English into those few Latin words, but you get the point.
When the prenuptial was signed in 2004, there were no Costner kids by Ms. Baumgartner. Now there are. Cayden 16; Hayes, 14 and Grace 13. These are the ages when children form insatiable material needs. When I was 16 I wanted a mini-refrigerator in my bedroom so I would not have to walk the 20 feet to the house refrigerator in the kitchen. Suffice to say, that need went unmet.
But then, my parents weren’t Hollywood stars. In July, there was a proceeding to decide interim support for the three Costner kids. Mom asked for $162,000 a month. Dad offered $62,000. On a temporary basis, it appears the court split the proverbial babies and awarded about $130,000. A trial was scheduled.
That trial took place last week and the judge issued a decision shortly after the hearing concluded. It appears that he entirely adopted Costner’s expense analysis as the final order is $62,000. He may have ruled quickly because, if the matter lingered and mom collected $130,000 in support for three months while the matter was decided, she would have to repay Mr. Costner the $210,000 he overpaid while the temporary order was in effect. That can be financially devastating.
We don’t know precisely what happened in court but suffice to say in the world of big dollar support cases, the real battle is over what is a reasonable need. In this case, the prenuptial required mom to depart from the oceanfront Costner compound and from what we have read, a lot of energy was devoted to showing that these children “needed” to resume oceanfront living when with their mother. In Southern California, that can be a lot of rent. Baumgartner contended that Costner earned an average of $1,600,000 a month. Thus, in one sense, her request was a mere 10% of his income.
But, the law of child support in almost every state imposes support based on “reasonable needs” and while the federal government requires states to adopt support formulae, the formulaic result is merely a presumption. The leading case on this subject in Pennsylvania is Hanrahan v. Baker, 186 A.3d 958 (Pa. 2018).
Herein lies the challenge. Judges are mere mortals. In California and in Pennsylvania they earn about $200,000 a year pre-tax. Knock off some taxes and they take home perhaps $15,000 a month. Many judges have spouses who work and that also helps to balance their budget. But when folks come before courts and start talking about what it takes to operate multiple multi-million dollar homes it gets a little absurd. That especially true in a judicial setting where the judge’s next case may involve a support award for the same number of children which is $3,000 a month.
Bear in mind, the Costner children appear to be on a shared custody schedule. That means on the weeks with dad, they will be able to put their toes in the ocean and avoid flying commercial. To many people in Ms. Baumgartner’s position, this seems inherently unfair. Why wouldn’t her teenage children abandon her in a world where these kids can get whatever they want so long as dad is willing to oblige. And many wealthy parents are not above playing that card. Some time ago, I tried a case where dad had acquired a $1 million house in the Outer Banks. Generous fellow that he was, he put the house in trust for the children (all then in elementary school) and presented the cost of the house as “their” expenses. His comment: “They’re the ones who like the beach, not me.”
From a judge’s perspective and, yes, even a trial lawyer’s, it can be tough sitting in a windowless courtroom all day while accountants and household staff describe what it costs for fresh flower deliveries, tennis and acting lessons or how safe everyone feels in a $250,000 Range Rover. Then everyone sits through the dozens of questions asking Ms. Baumgartner what her contribution to these expenses is. Finally, lawyers and accountant demonstrate their long division skills. Yes, the demanded support is almost $11,000 a day; $675 per waking hour for children who should sleep eight. The Court digested all of this and decided $4,000 a day would be sufficient.
There is no right answer to this. Costner is estimated to be worth $250,000,000 to Baumgartner’s $5,000,000. But courts seem to be clear that child support is not a mechanism for wealth transfer. And buried under all the books and records is the fact that unless their father “takes care of them” in his estate plan, these children will need to get an education and a job and a place to live their own lives. Or, as the Romans would put it: Vita continuat (Life goes on).