DETERMINING SUPPORT WHEN ONE SPOUSE IS NOT A W2 EMPLOYEE

When one spouse has his or her own business, the other spouse will usually have a concern that he/she will not be able to capture the actual income for support purposes.  Without records and reliable tax returns figuring out a person’s true income can be challenging, however, there are procedures that can be taken to determine income for support purposes.

To begin, you are the best source for this information. This is because you have lived with your spouse and know your lifestyle better than anyone.  Take your time and try to calculate how much money you need a month to maintain a resemblance to your lifestyle. Do not rush as this step is extremely important. You and your attorney will fill out a Statement of Net Worth. This legal document will itemize your monthly expenses, along with your assets and liabilities and will help determine your spouse’s true income.

Once you complete this document, you will have an idea of how much money is spent on a monthly and yearly basis.  Assuming you are not in financial debt or behind on your bills, you will be able to approximate your spouse’s income to at least cover your expenses.  This lifestyle analysis will also assist the Court to impute income, if necessary. You should be aware that the Court is not bound to a spouse’s income tax return or if that spouse alleges that he/she is barely earning a living when there are significant monthly expenses and no debt. If there is business involved, the Courts can appoint a forensic expert to evaluate the business and determine the value of the business and its cash flow.

If you are the non W2 employee, take caution in not cooperating. You are putting your financial future in the Court’s hands.  The Court may impute income for you, which is far greater than what you earn. This will cause you serious financial problems because your support obligation will be based upon what the Court believes you earn. You could then be faced with an Order of support that you cannot afford and will be subject to a violation of a Court Order and face a contempt application which could bring with it time in prison.  Again, remember, the Courts are not bound to your version of income, but what is believed to be actual earnings.

In order to save time and attorney fees, try to discuss this with your spouse and resolve it without Court intervention.