Cash Flow Versus Income in Divorce Cases


There are many different definitions of income that can be used in divorce and family law cases. Local law will play a big part in defining income, but in more complicated cases, other definitions may come into play. A forensic accountant can help the attorneys and the court understand the various types of income and why they should be included or excluded from income calculations.

The Internal Revenue Code is often a starting point for quantifying income in divorce cases. But experienced family lawyers know this is only the tip of the iceberg and doesn’t cover many of the unusual situations that could arise in cases with complicated financial scenarios.

In simpler cases, wage income and business income will be straightforward and will form the basis for calculating child support and spousal support. Undistributed income from a business venture may be an area of contention, but local laws often provide at least basic guidance on including such income in support calculations. Continue reading

Determining Support in Family Law Cases


divorce-child-supportThis article was originally printed in the ABA Section of Family Law eNewsletter, September 2013.

Spousal support and child support can be calculated using a number of different factors. The relative importance of the factors may be laid out in local rules, but often the factors are simply listed and defined with little other guidance.  Considerations may include:

  • The actual earnings of each person, including wages, investment income, and other sources of income
  • The earning capacities of each party, both independently and relatively
  • Future earning capacities of the parties
  • The value of the assets divided, and the ability of those assets to produce income
  • The cash flow of each party Continue reading