Spousal and child support are among the most important rulings that courts make when couples end their marriage. Judges take some common factors into consideration while ruling on these divorce matters.
Courts will consider all income sources while calculating a spouse’s ability to pay support. The family’s ability to maintain their lifestyle is important.
Courts review earned income from employment and other efforts and passive recurring income from investments. Earned income usually includes salaries, partnership distributions, employment benefits, corporate contribution to retirement accounts, performance or signing bonuses, deferred compensation and carried interest.
Courts also review the spouse’s most-recently-filed federal income tax return. But judges may also investigate money, assets or expenses that are not reflected in tax returns such as a second home or expensive private school costs. Manipulating income may have serious consequences because courts consider income averages over several years and any exceedingly high or low year may be suspicious and removed from the calculation.
Courts can impute income to a spouse if their actual income does not reflect what they could be earning. For example, this may include income from an earlier professional position for a spouse with a graduate degree who is working at a low-wage job. Or a court may consider money that a supporting spouse received from their family during marriage if that spouse was unemployed.
Spouse can take action to help assure a favorable agreement. They may accelerate the divorce filing so that the support evaluation is underway or completed before an anticipated increase in income is earned. Likewise, they may move slowly in the divorce process if income is expected to drop.
Generous property division and allocation of assets to the other spouse may also lower support payments. But support obligations may be lowered in the future even though asset allocation may not change.
The divorce agreement should specify a percentage where support obligations are reduced in an amount over this percentage when a spouse’s income drops. The other spouse, however, may also ask for a provision granting them more support if the supporting spouse’s income rises by a certain percentage. This clause also requires a supporting spouse to share income information when they pay support.
Spouses may need legal representation to help assure that a fair and reasonable decree is issued. An attorney can help protect their rights.