Proving Income For Support & Alimony Purposes

Proving IncomeIn a dissolution proceeding you both must provide financial information so the court may determine what the child support and (in some cases) alimony amounts will be in effect going forward.

What is Income?

For the purpose of support and maintenance issues, income is funds from any source, including wages, tips, commissions, overtime, benefits, interest dividends, annuities, gifts, winnings, and grants.

Florida is a “net-income” state, so the Court will use your gross income, subtract federal, state, local and social security taxes, based on allowable exemptions, and use that figure as the base for calculating support.

Child support payments for the benefit of other children are not considered “income” for these purposes.

Reporting Income

Both parties have to file a Financial Affidavit.  This is a Court form that takes into consideration income and assets, versus expenses and liabilities.  Your attorney will assist you in analyzing your situation to properly fill out your Financial Affidavit.

You can’t use your past financial records to prepare it accurately, unless you have already been living separately, because it would reflect your financial situation as a couple. You can’t just totally guess your future expenses because you’ll be cross-examined and asked where your magic crystal ball is.  You can’t use your current data because you’re in transition, and it’s probably not an accurate reflection of your usual life.

Let your attorney help you take all of these factors into consideration in preparing your Financial Affidavit.  And NEVER hide anything from your attorney!!  That’s the worst thing you can do for your case, no matter what it is.

Proving Income / Assets

Proving income and assets is important.  Documentation is crucial.  Paystubs, receipts, and statements from your financial institutions are the best way to show exactly what you have and what you earn.

Proving bills / expenses / obligations / debts

Bills, statements and receipts are also the best way to prove your liabilities. Proving that the money you spent was necessary and not “reckless” can be tricky, if you made some big-ticket purchases shortly before or during the process of divorcing.  Make sure you have documentation to justify all of your non-essential purchases.  For instance, if you bought a car a month before you filed for divorce, you would want to be ready to prove that your previous car was, or would have soon been, unsafe or undriveable.

The reason for this is that the court does not want to see that you have been “wasting” marital assets.  A big spending spree or purchase of an expensive item just before or during the divorce may mean it is not counted as a marital debt.

What to do if you think your spouse is hiding income / assets

If you think your spouse is working or reporting less hours than is accurate, you need to discuss it with your attorney.  If you suspect they are doing such as asking their employer to hold a bonus or raise until after the divorce goes through, hiding valuable assets like art or tools, or putting holdings in someone else’s name or in an offshore account, you will want to let your attorney know.

The onus, or burden, will be on you to prove it, so you’ll need documentation. During the discovery phase, your attorney can subpoena your spouse’s employer and financial institutions for copies of their records.  If you still think something is amiss, you and your attorney may find it necessary or worthwhile to hire an investigative professional.  A private investigator can follow your spouse to see if they are really at work the hours they say.  A forensic accountant can analyze bank statements and other records to track down “missing” assets.

Penalties for Hiding Assets

Hiding assets and income when you should be disclosing them is a serious offense.  You are essentially lying to the Court, which is perjury.  If you are found to have intentionally hidden assets or income, the court may impose punitive payments or sanctions.

Imputation of Income

If it is determined that one spouse is intentionally  “underemployed,” that is, intentionally working less hours, or a job far below his or her “potential” (which is determined by education level and job history), then the Court may see fit to reconfigure that spouse’s earnings for the purpose of figuring equitable distribution, child support and / or alimony.

For instance, Jack and Jill are in the process of divorcing.  Jack recently took a position at Burger King.  If Jack’s previous job was as a Construction Manager, the Court may determine that Jack is intentionally “underemployed” and may opt to figure his alimony and child support payments based on a construction manager’s wage, instead of an average fast food restaurant wage.

What to Do

If you think your spouse is attempting to hide assets, or misrepresent their financial status, don’t try to play the same game.  Do work with your attorney to determine the best course for revealing the deception.  An experienced family law attorney will be able to help the truth come out, and ensure the support and alimony amounts are fair.