Divorce Issues: Calculating Spousal Support

Standard

Each state has its own guidelines for calculating spousal support. Generally, factors which may be considered in determining alimony include:.

  • The length of the marriage
  • The needs of the recipient
  • The relative earnings of each party
  • Career sacrifices made to benefit the family (i.e. one parent gave up a career to raise children or one spouse worked so the other could complete a college degree)
  • The earning capacity of each party
  • The ability to pay spousal support
  • The lifestyle of the spouses during the marriage
  • The age of the parties
  • The property divided by the spouses
  • The ability of the recipient to earn income in the future

Completing an analysis of the expected post-divorce cash flow can help sort out these issues. In such an analysis, the expert may include the wages each party will earn, the investment income each may receive, assets available for investment, taxes required to be paid by each, and projected short-term and long-term expenses of each spouse.

Calculating income for spousal support can be fairly straightforward if the spouses only have W-2 earnings from jobs with companies unrelated to them. The calculations are more complex when one or both spouses has self-employment income, works in a job with non-traditional compensation, owns multiple business, owns multiple pieces of income-producing real estate, or has income from trusts.

Documents that are needed to analyze these income issues include:

  • Income tax returns, both business and personal
  • Financial statements
  • Bank, credit card, and investment account statements

Many other documents may be needed to do a complete financial analysis, and a lengthy list of possible documents is found here.

Items that should be included in calculating income will vary by state, but the following items are usually considered:

  • Wages
  • Investment income
  • Business income
  • Rental income
  • Royalties
  • Other sources of income (varies by jurisdiction)

More information on calculating income for purposes of divorce actions can be found in my book Lifestyle Analysis in Divorce.

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