Details of Katie Holmes’ and Tom Cruise’s divorce settlement recently surfaced, highlighting the fact that support payments have to be viewed in relation to a number of other factors. According to this article, Holmes will receive $400,000 per month for 12 years in child support under the settlement. She will not receive any spousal support or alimony.  Depending on how you view the $400,000 amount, it is a lot or a little.

At first blush, the amount of child support Holmes will receive seems like a lot. Most everyday people do not need $400,000 per month to provide for their children. On the other hand, the total amount of child support she will receive over 12 years – $4.8 million – does not seem all that large in comparison to Cruise’s net worth, which is reported to be $250 million.

Holmes and Cruise reached their settlement pursuant to a prenup they signed prior to their marriage. As I have discussed in previous blogs, a prenup is a valuable tool for planning for potential divorce, especially when the marrying partners are very wealth or when one partner has significantly greater wealth than his or her fiancé.

Had Holmes and Cruise not had a prenup, they could have reached a settlement out of court, or they could have gone to court. In either case, both their attorneys and a judge would consider factors such as the child’s needs and her accustomed standard of living in determining the amount of child support. Using such factors, the amount of child support Cruise will have to pay each month could be reasonable. Holmes will have to cover the costs of constant security for her daughter. Child support can also be used for expenses such as their daughter’s private schooling and activities.

If you have any questions about prenups or the divorce process, including settlements and child support, please feel free to contact the experienced family law attorneys at Petrelli Previtera.