Question (by email): My husband, who is in business for himself, and I are unable to agree on support for our three children -- ages 11, 15, and 17. My lawyer tells me that there are guidelines that cover support, but I can't seem to make him understand that my husband is hiding income, contributing to his retirement plan, and getting all kinds of benefits from his business that are not reported on his tax returns. It seems to me that the guidelines should cover these things, but the lawyer tells me not. How can I get reasonable support for my children when I am hamstrung before I even go into the court room?
Answer: With the intention of reducing the cost of welfare programs by moving the economic burden for children to their parents, Congress passed the Child Enforcement Act in 1984 which forced every state to establish child support guidelines. Although similar, each state's guidelines have idiosyncrasies. For example, some states use an "adjusted gross income" model. while others use "straight gross income" or "net income" in computing support. Generally, the guidelines consider the earnings, income and resources of each parent and provide for health insurance coverage when available at reasonable cost. Some give consideration to alimony, health coverage cost, and daycare costs in the formula; others do not.
Intended to make awards more uniform -- rather than varying from county to county or from judge to judge, the guidelines certainly do not meet the needs of all litigants. For example, some guidelines do not address circumstances which could require deviation from the norm -- such as tuition and other educational expenses for the children or spouse, awards of equitable division of property, pre-existing debt, required deductions for retirement and pension, and union dues. Other guidelines do not apply to families with large numbers of children or households with incomes of more than $120,000. Some guidelines do not take into consideration such important economic situations such as dependents living with the obligor parent, consensual support paid to children from another relationship, large medical or dental expenses for the children or parents, military allowances which are not included in gross income and on which no taxes are paid, and benefits provided to one spouse as an incident of employment - such as contributions to retirements plans or pensions and fringe benefits which are not shown on tax returns -- like a company car provided as an incident of employment. And, where there is either joint or shared physical custody, the guidelines will probably not apply.
In some states, "discretionary income" -- like deferred compensation - and available resources may not be considered. And there are continuing problems that arise with spouses who are not working to capacity, who are borrowing money from parents, or who are suppressing income in an effort to beat the system. And then there are those who under-utilize their assets -- that is, invest money in non-income producing property rather than try to earn interest or dividends that may be subject to the guidelines.
On the other side of the coin, there are those who are taxed on funds even though they do not receive them -- such as Sub Chapter S and partnership income that is reported on the tax return, but has not been received.
Bottom line: Guidelines were created for the average wage-earner, not to develop the true income of the higher wage earner or sole proprietor. Although the support guidelines may be presumed to be fair, most states provide that the court can vary the award of child support if the result would otherwise be unjust. And, of course, the Court may take into account assets available to generate income for child support by imputing a reasonable rate of return from assets. But to get to this point, there must be proof and a court proceeding. Unfortunately, there is little time -- especially at temporary hearings -- to try to secure a child support award that is outside the guidelines.
That's why lawyers must be prepared to challenge the guidelines with proof in appropriate cases. In order to allow for this, you must provide your lawyer with everything you can to show the benefits your husband is receiving so that, in turn, your lawyer can make a presentation to the court. But be prepared for a long and possibly expensive battle since overloaded courts sometimes look on the guidelines as the most expedient way in which to set child support, regardless of the circumstances.
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