“Mel Gibson’s ex sued for $108K over child support fight” (Page Six) provides an interesting window into just how much Americans spend on transaction costs in family court:
Court documents obtained by The Blast reveal the forensic accounting firm that Grigorieva, 47, hired to investigate baby daddy Mel Gibson’s finances in her child support fight, is suing the singer for $108,000 for unpaid fees.
Grigorieva hired White, Zuckerman, Warsavsky, Luna & Hunt following her 2015 bankruptcy filing, and the company claims they aided Grigorieva in getting her child support payments increased to $22,500 per month for daughter Lucia.
In their filing, the firm noted that Gibson, 61, paid the bulk of their charges with the exception of the unpaid balance of $108,887.24.
I.e., the accounting fees were in excess of $218,000 for this child support modification action (Gibson paid at least 50 percent if it was “the bulk of the charges”). Just imagine the legal fees!
Note that, despite the fees, litigation should have been a rational strategy for the plaintiff. Her daughter is now yielding tax-free revenue of $270,000 per year. That’s nearly $5 million over the 18 years during which a child can yield a profit under California family law. Legal and expert fees might be pretty close to the $5 million number, but her defendant will pay most of them.
[The defendant in this case is famous, which is why the lawsuit is in the news, but this scale of fees is consistent with what is spent when ordinary high-income Americans are sued.]
Young readers: Remember that going to accounting school doesn’t mean being stuck filing 1040 returns!
- “Litigation, Alimony, and Child Support in the U.S. Economy” (adding it up nationwide)