CALCULATING SUPPORT WHEN A SPOUSE IS WORKING OFF THE BOOKS

When one spouse works off the books or in a predominately cash business, there is the fear from the other spouse of an inability to capture that person’s true income for support purposes.  While it is true, without records and reliable tax returns figuring out a person’s true income can be challenging, however, there are things you can do to approximate income for support purposes.

First, you are the best person to know your financial situation, even if you were not the party responsible for paying your bills.  You know approximately the cost of your mortgage and carrying costs each month.  You know what type of cars you drive, and the expenses associated with them.  You know how many times a week you go out to dinner and where those dinners take place.  You know your family vacations; the amount you spend on clothes; gifts and the cost of other expenses you pay on a monthly or yearly basis.  You will fill out a Statement of Net Worth, which lists all of your assets and liabilities.

After your Statement of Net Woth is done you will have an idea of how much money is spent on a monthly or yearly basis.  Assuming there is not a significant amount of credit card debt, or you were behind on your bills, you will be able to approximate how much your spouse must be earning to at the very least cover these bills.  This lifestyle analysis will assist the Court in imputing income to the spouse if it is believed that your spouse’s submission of finances is suspect.   If there is a business involved, the Court can have a forensic expert evaluate the business and determine not only how much a company is worth, but also its cash flow.

If you are the spouse working off the books, take caution in not cooperating with the Court. If the Court fails to believe your finances, it may impute income to you which is far more than you earn. This will cause you serious financial problems in the future because you can be ordered to pay a support obligation that you cannot afford.  Remember, the Court is not bound to your version of your income, especially if they find it suspect.  

Imputing income is not an exact science.  You do not want to spend months—and numerous attorney hours—figuring out what an approximate income is for the off-the-book spouse.  Speak to your spouse and attempt to work this out.  If you cannot your attorney and the Courts will do it for you, but this will cost both of you time and money.