Answer By law4u team
Retainer fees are upfront payments made to lawyers or other professionals to secure their services. In family law cases, courts focus primarily on a party’s actual income and reasonable expenses when calculating support obligations. Whether retainer fees are considered depends on their nature, timing, and impact on disposable income. Courts generally scrutinize all financial outflows but aim to ensure that support calculations reflect the true ability to pay while considering necessary expenses.
How Retainer Fees Are Treated in Support Calculations
Classification of Retainer Fees
Retainer fees are usually considered part of legal expenses, not income or regular expenses.
Courts distinguish between necessary living expenses and discretionary spending like legal fees.
Impact on Financial Disclosure
Parties must disclose retainer fees paid as part of overall expenses.
Large or unusual legal fees might be questioned to assess if they reduce the ability to pay support.
Reasonableness of Legal Fees
Courts assess whether legal fees, including retainers, are reasonable and necessary.
Excessive or frivolous legal spending may not reduce support obligations.
Temporary vs. Permanent Effect
One-time retainer fees may temporarily affect available funds but do not permanently reduce income for support calculations.
Recurring legal expenses related to the case might be considered when assessing monthly disposable income.
Discretion of the Court
Courts have discretion to allow or disallow legal fees as deductible expenses based on circumstances.
Practical Considerations
- Parties should fully disclose legal fees and retainers in their financial affidavits.
- Providing receipts and invoices can help courts understand the nature of fees.
- Legal fees related to defending or enforcing support orders may sometimes be recoverable or considered separately.
- Courts strive to balance fair support payments with realistic financial burdens.
Consumer Safety Tips
- Always include retainer fees in financial disclosures for transparency.
- Keep detailed records of legal expenses and retainers paid.
- Consult your attorney about how legal fees might impact your support calculations.
- Avoid excessive or unnecessary legal spending during support proceedings.
- Understand that legal fees might not reduce your support obligations if deemed unreasonable.
Example
A parent pays a $5,000 retainer fee to a lawyer for a custody and child support case.
How it is handled:
- The parent reports the retainer fee in their financial disclosure affidavit.
- The court reviews the fee to determine if it is reasonable and necessary.
- If deemed reasonable, the court may consider it as a temporary expense but not a permanent reduction of income for support calculations.
- Support payments are calculated based on income after necessary living expenses, excluding unreasonable legal fees.
- If the fee is excessive, the court may disregard it when determining disposable income.