Dennis Quaid Child Support: Reasonable Needs

When child support or spousal support is calculated for a “normal” person, we often use a percentage of income. It’s simple. It’s often fair. And it’s a way to standardize things.

When someone makes a ton of money, calculating support based on a percentage of income isn’t necessarily so fair. If someone is making $75,000 per year and the ex-spouse is not employed, paying 25% of the income ($18,750 per year) in child support might seem reasonable. (There are lots of factors involved… I’m using the simplest possible scenario here.

But if someone makes $5,000,000 per year and has an ex-spouse who is not working, is the same 25% ($1,250,000 per year) fair. Many times the answer is no.

In the case of actor Dennis Quaid, the divorce agreement with his ex-wife Kimberly specified $13,750 per month of child support ($165,000 per year). However, if he made more than $1.3 million in a given year, the amount was to be increased. In a recent court filing reported on by TMZ, Quaid admitted to earning approximately $550,000 per month in 2019 (or $6.6 million for the year).

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Disappearing Income and Asset Values in Divorce

We’ve all seen it before: A spouse owns and operates one or more businesses. Divorce is filed, and the “out” spouse is told that the businesses have little or no value. Further, there is no income available to pay support, thanks to the poor financial condition of the businesses.

How can this be when the married couple has lived a good life for years, always having more than enough money to pay for homes, living expenses, and vacations? It’s the case of the disappearing income and asset values, brought on by the divorce.

Fortunately, there are ways to ferret out truth behind the financial picture that is being presented. It likely will not be easy. The “in” spouse controls the money, the information, and the documents. Getting him to turn over financial documents that will prove there is income and value will be difficult.

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Financial Aftermath of an Imprecise Premarital Agreement

A divorcing couple has a premarital agreement, so everything is simple when it comes to dividing assets and paying maintenance, right? Of course not. Premarital agreements are rarely simple, and they become even more complicated when the language in the agreement is imprecise.

This high net worth divorce case study provides some important insights into the process of completing a lifestyle analysis and calculating support. In this case, an imprecise premarital agreement led to problems in analyzing the marital lifestyle, excluding certain questionable expenses, and calculating future needs.

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Business Lifestyle Analysis in Divorce

Divorcing spouses who own one or more businesses need a detailed financial analysis in order to properly evaluate these interests. A Business Lifestyle Analysis may be performed to determine the true income of the company and find out where the money is really going. Tracy Coenen talks about how she analyzes the detailed accounting records … Read more Business Lifestyle Analysis in Divorce

Sale on Lifestyle Analysis Book (Today Only)

Today is your chance to get a 40% discount off list price for the second edition of my book Lifestyle Analysis in Divorce Cases: Investigating Spending and Finding Hidden Income and Assets. The American Bar Association rarely discounts its books, and the title won’t be available on Amazon for a year or more. So today … Read more Sale on Lifestyle Analysis Book (Today Only)

How to Investigate a Cash Business

Closely-held businesses often create problems in divorces, as they need to be valued for the property division and the income needs to be evaluated for support purposes. It can be difficult to examine the income of a business that transacts with its customers primarily in cash. However, there are ways to verify whether the income being reported is reasonable.

Some of the ways that the income of cash businesses can be examined and verified include:

1. Find out the normal mark-up or profitability of the product or service being sold, and see how recently reported figures of the company compare.

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